INFLUENCE OF ENTREPRENEURIAL ORIENTATION ON PERFORMANCE OF CONVENTIONAL AND ISLAMIC BANKING IN KENYA
Keywords:
Entrepreneurial Orientation, Performance, Conventional, Islamic bankingAbstract
Purpose: The research was done to establish the influence of entrepreneurial orientation on performance of Conventional and Islamic banking in Kenya.
Methods: The study adopted a mixed methods research design based on descriptive, non-experimental and causal approaches. This study considered a census that targeted a population of all the forty three (43) commercial banks that were operational in Kenya as at 31st December 2016. The commercial banks also consist of Islamic banks which offer Shari’ah compliant products and services. This study used a questionnaire as the main instrument for primary data collection. Data preparation started start by coding and cleaning, the primary data obtained from the questionnaires were checked for omissions, legibility and consistency before being coded for analysis. Processed data was analysed by using both descriptive and inferential statistics. Stata version 15 was used for statistical analysis and presentation tables of the results processed in Microsoft excel. Descriptive analysis was done for the observed indicators and presented as frequency, percentages, mean and standard deviation to reveal the distribution trends. The data collected was in the form of observed indicators of larger constructs, thus multivariate dimension reduction techniques (factor analysis) was to be used to form composite latent constructs. The latent constructs generated after dimension reduction was used for statistical modelling.
Results: The findings indicated that the mixed effect model fitted with EO as a predictor showed that EO had a significant coefficient estimate at the respondent level (level-1) but there was no significant random effect with EO as a random covariate. A bivariate regression model with considering no random intercepts and no random covariates was fitted to measure the influence of EO on performance only at level 1. The coefficient of EO on performance at level one was found to be 0.824 which implied that increasing the levels of EO by a unit would increase the banks Performance by 0.824 regardless of the banking system.
Unique Contribution to Theory, Practice and Policy: The researcher recommended that an increase of the Entrepreneurial Orientation in the banking sector in Kenya is fundamental in the performance of the sector, risk taking and proactiveness elements will go a long way in the growth of the banking industry
Downloads
References
Dimitratos, P., Lioukas, S., & Sara Carter, S. (2004). The Relationship betweenEntrepreneurship and international performance: The importance of domestic Environment. International Business Review. Vol. 13(1):19-41.
Hult, T. G., Snow, C., & Kandemir, D. (2003). The Role of Entrepreneurship in Building Cultural Competitiveness in Different Organizational Types. Journal of Management. 29. 401-426.
Ireland, R. D., Hitt, M. A., & Sirmon, D. G. (2003). A Model of Strategic Entrepreneurship: The Construct and its Dimensions (February 13, 2009). Journal of Management, Vol. 29, 6.
Lumpkin, G. T., & Dess, G. G. (2001). Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle. Journal of Business Venturing, 16: 429-451.
Mahmood, R., & Hanafi, N. (2013). Learning Orientation and Business Performance of Women Owned SMEs in Malaysia: The Mediating Effect of Competitive Advantage British. Journal of Arts and Social Sciences. Vol.11 (II): 112-161.
Marhani, A, S, W. & Cahyono, E. (2013). The Influence of Entrepreneurial Orientation to Firm Performance. Conference materials, Universitas Halu Oleo Kampus Bumi Tridharma Anduonohu Kendari 93232 Indonesia.
Miller, D., & Friesen, P.H. (1984).Organizations: A Quantum View, Englewood Cliffs, New Jersey: Prentice – Hall.
Mwangi, M. M. A. & Ngugi, K. (2014). Influence of Entrepreneurial Orientation onGrowth of Micro and Small Enterprises in Kerugoya, Kenya. European Journal of Business Management, 1 (11): 417-438.
Otieno, S., Bwisa, H.M., & Kihoro, J.M. (2012). Influence of entrepreneurial Orientation on Kenya’s manufacturing firms operating under East African regional integration. International Journal of Learning & Development, 2(1), 299-320.
Tajeddini, K. & Mueller, S. (2012). Corporate entrepreneurship in Switzerland: Evidence from a case study of Swiss watch manufacturers. International Entrepreneurship and Management Journal, 8(3), 355-372.
Tang, Z., & Tang, J. (2012). Entrepreneurial orientation and SME performance in China’s changing environment: The moderating effects of strategies. Asia Pacific Journal of Management, 29(2), 409–431.
Wambugu, A.W., Gichira, R. & Wanjau, K. (2016). Influence of Entrepreneurial Orientation onFirm Performance of Kenya’s Agro processing Small and Medium Enterprises. Journal of Business and Management. Vol. 18, 9(II): 89-96.
Downloads
Published
How to Cite
Issue
Section
License
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
