FINANCIAL CAPITAL, ENTREPRENEURIAL ORIENTATION AND ENTERPRISE PERFORMANCE IN NAKURU COUNTY, KENYA
Abstract
The general objective of the study was to determine effect of financial capital, entrepreneurial orientation on the enterprise performance in Nakuru County, Kenya. The study was guided by Multidimensional Model of Entrepreneurship. The targeted population was 54201 registered and licensed SMEs in Nakuru County. A stratified and random sampling technique was used to select a sample of 396 SME derives using Yamane formula. Five-point Likert scale structured questionnaires was used to collect data. A Cronbach's Alpha coefficient of 0.7 or higher was taken into account in testing reliability of the questionnaire. Construct validity was tested using factor analysis. Data was analyzed using descriptive statistics (frequencies, percentage, mean and standard deviation) and inferential statistics (Pearson correlation, and hierarchical regression. The findings showed that financing capital (β=0.326, p<0.05), had positive and significant effect on enterprise performance. Further results indicated that entrepreneurial orientation positively and significantly moderated the relationships between financial capital (β = 0.34, p < .05) and enterprise performance. This implies that the influence of these financial capital on enterprise performance is enhanced when coupled with a higher level of entrepreneurial orientation. The study concludes that financial capital is key contributor to the performance of small and medium enterprises in Nakuru County, Kenya. Equally, the influence of financial capital on SME performance is contingent on the entrepreneurial orientation. The study suggests that SME owners/managers in Nakuru County focus on enhancing financial capital to improve enterprise performance. Specifically, efforts should be directed towards improving social capital where pathways for networking and strategic alliances can be built to enhance performance. Additionally, fostering entrepreneurial orientation among SMEs can amplify the positive impact of these capital assets on performance, thus facilitating long-term sustainability and growth of SMEs in the region.
Keywords: Financial Capital, Entrepreneurial Orientation, Enterprise Performance, SMEs
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