Combined Effect of Entrepreneurial Competencies, Absorptive Capacity and Intellectual Property Policy on the Performance of Manufacturing SMEs in Nairobi County Kenya
DOI:
https://doi.org/10.47604/ijepm.3996Keywords:
Entrepreneurial Competencies, Absorptive Capacity, Intellectual Property Policy, Manufacturing Sector, SMEs PerformanceAbstract
Purpose: This study examined the combined effect of entrepreneurial competencies, absorptive capacity and intellectual property policy on the performance of manufacturing small and medium enterprises (SMEs) in Nairobi County, Kenya. Intellectual property policy was operationalized at firm level through the generation, protection and strategic utilization of six intellectual property mechanisms: patents, trademarks, industrial designs, copyright, utility models and trade secrets.
Methodology: A descriptive research design employed a quantitative approach that provided a comprehensive analysis of the relationships under study. The target population comprised 590 manufacturing SMEs in Nairobi County drawn from four sectors: food and beverage processing, cosmetics and detergents, leather and leather goods, and metal fabrication. Data was collected from SMEs from Nairobi County Kenya.
Findings: Using data from 202 manufacturing SMEs, hierarchical multiple regression was estimated using a composite SME Performance Index based on innovation rate, sales turnover, market share and profitability. The final model was statistically significant, R² = .410, adjusted R² = .401, F(3, 198) = 45.87, p < .001. Intellectual property policy emerged as the strongest unique predictor (B = .387, β = .523, p < .001), followed by entrepreneurial competencies (B = .251, β = .236, p = .002), while absorptive capacity did not make a statistically significant unique contribution after the other capabilities were controlled (B = -.019, β = -.018, p = .797). The findings indicate that entrepreneurial action and knowledge absorption are insufficient for superior performance unless SMEs possess mechanisms for protecting and capturing value from knowledge.
Unique Contribution to Theory, Practice and Policy: The study extends the Knowledge-Based View and Knowledge Spillover Theory of Entrepreneurship by linking knowledge access, entrepreneurial agency, leadership-enabled capability development and IP-based value appropriation within an integrated SME performance architecture.
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Copyright (c) 2026 Rose A. Mboya, Prof. Evans Vidija Sagwa, PhD, Dr. Pamela Adhiambo Mreji, Dr. Hezron Mogaka Osano, PhD
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