Transactional Supply Chain Governance and Performance of Agro Processing Firms in Kenya

Abstract

Purpose: Agro processing sector is a widely diverse subsector and is vital to the production of food, beverages and non-food products. The sector contributes in earning foreign exchange, growth of gross domestic product and offer employment opportunities. The sector is inefficient in terms of value addition to the agricultural produce as Kenya exports raw agricultural produce instead of high-quality value-added products. This study therefore, sought to determine the effect of transactional supply chain governance on performance of agro processing firms in Kenya. Methodology: This study adopted a survey research design. The study focused on 344 agro processing firms in Kenya. This study used a census survey and data was collected using selfadministered questionnaires. The data collected was analysed using SSPS version 25. Data analysis was conducted using descriptive and inferential statistics by use of moderated multiple regression analysis. Findings: The findings of this study revealed that transactional supply chain governance had a significant and positive effect on performance of agro processing firms in Kenya. The model found out that the coefficient of determination was 0.597 implying that 59.7% performance of agro processing firms in Kenya is explained by transactional supply chain governance. The study concluded that transactional supply chain governance was critical in enhancing the performance of agro processing firms in Kenya. Unique contribution to theory, practice and policy: The study recommended that agro processing firms should implement the systems of transactional supply chain governance to enhance their profitability, sales growth and market share