Effect of entrepreneurial orientation on agri-enterprise performance among agri-input suppliers in Nakuru county, Kenya

Abstract

Start—ups and small-scale agri-input suppliers (AIS) play critical roles in Kenya’s agricultural development sector. Nakuru county is the hub of agricultural activities, which include leading producers of flowers, potatoes, milk, cereals, and vegetables in Kenya, creating an enabling environment for AIS start-ups to thrive by supporting the agricultural value chain as input providers to primary producers. However, competition from established, medium, and large- scale agri-input suppliers puts them at risk of closing or inhibiting their survival potential, causing economic and agricultural value chain disruption. Entrepreneurial orientation (E0) manifestations in proactiveness, innovation, and risk-taking actions and behaviour, are considered the critical aspect of any enterprise’s start-up success, as they positively influence their growth and performance. The study aims to enhance sustainable agripreneurship through implementing entrepreneurial orientation actions and behaviour in agri-enterprises’ operations through the development of entrepreneurial orientation levels, determining factors influencing the entrepreneurial orientation levels and their effect on agri-enterprise performance. Such focus lacks empirical evidence on AIS; hence, the study tries to fill this research gap. The study was carried out in Nakuru County, where three sub-counties were purposively selected: Nakuru-East, Nakuru-West, and Bahati. Data from 137 randomly selected respondents were captured using face-to-face interviews. Descriptive statistics: Analysis of Variance, F-statistics, and Chi-square was used to characterise agripreneurs’ socio-economic factors, institutional networking, and agri-enterprise factors. The principal component analysis and quantile technique generated three levels: conservative-oriented, moderate-oriented, and high-level entrepreneurial oriented. The generalised ordered logit model was used to evaluate the influencing factors. Overall, the variety of traded agri-input products showed the most significant favourable influence on EO levels, followed by the business plan, partnership, customers’ contracts, and gender factors. On the other hand, years of AIS operation and the number of AIS owners negatively influenced EO levels. The partial least square, a structural equation modelling technique, was used to assess the effect of entrepreneurial orientation on agri-enterprise performance. The findings revealed that entrepreneurial orientation strongly predicts agri-enterprise performance. A positive impact of 0.440 and 0.481 was identified for both components and levels, explaining 23% of the agri-input suppliers’ performance. The study emphasises the importance of entrepreneurial orientation in aiding critical stakeholders in developing a solid understanding of the role of entrepreneurial orientation in shaping SME performance