Effect of Networking Capabilities on performance of Small and Medium Enterprises in Kenya. Does Entrepreneurial Self Efficacy Matter?

Abstract

The general purpose of the study was to examine effect of networking capabilities and entrepreneurial self-efficacy on the performance of Small and Medium Enterprises in selected towns of the North Rift Region -Kenya. The study was anchored by the theoretical approach of Resource Based View and Social Capital theories. Sample size of 323 drawn from a population of 4596 Small and Medium Enterprises registered with the Uasin Gishu, Tranzoia and Nandi Counties was collected using self-administered questionnaires. Hierarchical and multiple regression model using Hayes process Macro were used to analyze data and test the hypothesis. The variables were tested for reliability and validity by computing the Cronbach alpha and factor analysis statistical tests respectively. The study found that; networking capabilities and entrepreneurial self-efficacy significantly affects firm performance. The study found that entrepreneurial self-efficacy moderates the indirect relationship between networking capabilities and small and medium enterprises performance. The study contributes to knowledge by revealing moderation model of self-efficacy between the variables of the study. The new knowledge introduced is that entrepreneurial self-efficacy moderates the indirect links between networking capabilities and Small and Medium Enterprises performance. The government should therefore develop effective strategies that will help improve Small and Medium Enterprises performances by applying the networking capabilities and entrepreneurial self-efficacy unique dimensions.