Human Capital, Entrepreneurial Orientation and Enterprise Performance in Nakuru County, Kenya

Authors

  • Mettoh Philip Mwei Murgor
    PhD student, Department of Management Science and Entrepreneurship, School of Business and Economics, Moi University
  • Prof. Bernard Kibeti Nassiuma
    Department of Management Science and Entrepreneurship, School of Business and Economics, Moi University
  • Prof. Peter Isaboke Omboto
    Department of Economics School of Business and Economics, Moi University

Abstract

Purpose: The main purpose of the paper was to determine the effect of human capital and entrepreneurial orientation on enterprise performance in Nakuru County, Kenya. The study was guided by the Multidimensional Model of Entrepreneurship and the Resource-Based View (RBV) theory.


Material/methods: The study adopted a positivism philosophical paradigm and employed an explanatory research design. The target population comprised 54,201 registered and licensed SMEs in Nakuru County. A stratified and random sampling technique was used to select a sample of 396 SMEs, derived using Yamane’s formula. Data collection was conducted using a five-point Likert scale structured questionnaire. Hypotheses were tested using hierarchical regression analysis.


Findings: The results indicated that human capital had a positive and significant effect on enterprise performance. Furthermore, entrepreneurial orientation positively and significantly moderates the relationship between human capital and enterprise performance. This finding implies that the influence of human capital on enterprise performance is enhanced when coupled with a higher level of entrepreneurial orientation.


Conclusion: The study concludes that human capital is a key determinant of SME performance in Nakuru County. Additionally, the impact of human capital on enterprise performance is contingent upon the level of entrepreneurial orientation within SMEs.


Value: The study provides valuable insights for SME owners and managers, suggesting that enhancing human capital can improve enterprise performance. Furthermore, fostering entrepreneurial orientation can amplify the positive effects of human capital, thereby contributing to the long-term sustainability and growth of SMEs in the region. Theoretically, the study contributes to existing literature by providing empirical evidence on the effects of capital assets on enterprise performance.