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VOL. 7, ISSUE 2 (2025)
Digital technology adoption and the performance of micro, small and medium enterprise firms in Kenya. implications for informal sector engagement
Authors
Jacqeline Wanjiku Njoroge, James Murunga
Abstract
The COVID-19 pandemic had negative effects on the financial performance
of micro, small and medium enterprises, particularly those operating within the
informal economy. This forced the firms to rethink their business models in
order to survive and compete with firms in the formal economy. In response, a
significant number of micro small and medium enterprises adopted digital
technologies to facilitate business continuity and raise their resilience
against shocks similar to COVID-19. While existing literature acknowledges the
critical role of digital technology in enhancing the performance of micro,
small and medium enterprises, there exists scanty literature examining its
impact on the performance of micro, small and medium enterprises in Kenya. This
study therefore uses micro, small and medium enterprise 2016 survey data to
estimate the effect of digitalization on the performance of micro, small and
medium enterprises in Kenya. On using propensity Score matching method, the
study finding show that micro, small and medium enterprises that adopt digital
technology realize KES 7.55 million more than one that has not adopted. Based
on this finding the study makes the following recommendations. First, there is
need for the government of Kenya to implement targeted programmes to support MSMEs.
One of the targeted programmes is training MSMEs on how to use digital
technologies. Secondly, the government should invest in a reliable internet and
affordable ICT infrastructure particularly in rural areas.
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Pages:50-55
How to cite this article:
Jacqeline Wanjiku Njoroge, James Murunga "Digital technology adoption and the performance of micro, small and medium enterprise firms in Kenya. implications for informal sector engagement". International Journal of Management and Economics, Vol 7, Issue 2, 2025, Pages 50-55
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