Discussion Paper No. 257 of 2021 on An Assessment of Kenya’s Regulatory Framework on Growth of Wholesale and Retail Firms

Abstract

The growth of wholesale and retail trade is significant in the development process and was identified as a contributor to the achievement of Vision 2030 through job creation. Its growth has been declining over the years constraining its ability to contribute to job creation and gross domestic product as envisioned by Vision 2030. A key factor that influences growth of the sector is regulatory framework that has implications on firm performance. This study assesses the effect of Kenya's regulatory framework on the wholesale and retail trade sector through growth of its firms. the study objective, the existing regulatory framework for wholesale and retail trade was reviewed and policy gaps identified. A crosssectional dataset from the World Bank enterprise survey 2018 was used for empirical analysis as it contains regulatory variables that influence the growth of wholesale and retail trade firms. The Tobit model was used for regression analysis. The study established that business registration regulations, licensing regulations, firm size, use of mobile money, business having its own website, membership to trade association and training of employees enhances firms’ ability grow and create jobs.