Entrepreneurial Innovation and Performance of Small and Medium Paper Wood Manufacturing Firms in Kenya

Abstract

Small enterprises could be facing challenges that often stimulate entrepreneurial innovations. The performance of small and medium paper and wood manufacturing firms in Kenya has been a matter of concern and this is evident as the industry has been struggling overtime. Large paper and wood manufacturing in Kenya Webuye Paper Mills collapsed and now light paper and wood processing industries are in existence. This industry supplies 80% of Kenya’s requirement for paper and paper board to many paper-convertors, however, the demand for wood and paper products is still unsatisfied warranting some importation. The aim of the study was to investigate the influence of entrepreneurial innovation on performance of small and medium paper and wood manufacturing firms in Kenya. The study population were 437 small and medium paper and wood manufacturing firms in Kenya where the unit of observation was operational manager from each of the enterprise. Thus, the target population were 437 operations managers for small and medium paper and wood manufacturing firms, while the unit of analysis were the small and medium paper and wood manufacturing firms. Slovin's formula was used to obtain a sample size of 209 small and medium paper and wood manufacturing firms. The questionnaires were administered in two ways: drop and pick method and emailing survey. Quantitative data collected was analyzed using descriptive statistics techniques. Qualitative data was analyzed using content analysis. Pearson R correlation was used to measure strength and the direction of linear relationship between variables. Multiple regression models helped to quantify the association between the study variables. Statistical package for social scientists (SPSS) version 27 was used to conduct the analyses. The study established that entrepreneurial innovation aspects such market innovation, product innovation and process innovation are significant predictors of performance of small and medium paper and wood manufacturing firms in Kenya. Strengthening innovation in the organization through focusing on improvements of market innovation, product innovation and process innovation is key in realizing sustained and desirable performance in an organization. The study recommended more investment on innovation in order to create a conducive environment. Additionally, the study recommended an open mind to new innovative ideas in the industry, particularly in the management and administrative teams.

Keywords: Entrepreneurial innovation, performance of small and medium paper, wood manufacturing firms

DOI: 10.7176/EJBM/17-4-01

Publication date: May 30^th 2025