The paper explores the business sector and firm age effects on firm performance mediated by foreign ownership levels in domestic firms and financial leverage by examining 146 Medium Enterprises (MEs). The results show that except for ownership, the business sector, firm age, foreign ownership level, and financial leverage significantly influence performance. Foreign ownership substantially mediates the correlation between firm age and performance but not leverage. Both foreign ownership and leverage have no substantial mediating effect on the relationship between the business sector and financial performance. Moreover, the findings reveal business sectors whose performance is statistically different from zero based on the referent group.

Sufficient literature supports small and medium ‘enterprises’ (SMEs) significant role in emerging and mature economies. Still, the same research highlights varying challenges that innovative firms in developing economies face, like access to formal credit and external markets. This study examines the effect of a capital budget’s proportion for acquiring new technology and sale performance between 2017–2019 using a sample of 101 Kenyan SMEs. The ordinary least square moderated mediation results indicate that: (1) the proportion of the capital budget allocated for the acquisition of technology positively and significantly influences sales; (2) the index of moderated mediation suggests that the perception of firm owner-managers towards the availability of formal credit moderates the mediated relationship between the capital budget’s portion spent on technology and sales as mediated by innovation activities. However, the index is insignificant for the second mediator, export longevity. However, in the final model, both the level of innovation and export longevity positively and substantially affect sales.

The study explores factors influencing research and development (R&D) costs in developing economies. The findings may inform the decision-making process for firms keen on innovation-related expenditures. The paper examines 164 Kenyan firms using the World Bank Enterprise Survey (WBES) data for 2018. These factors are classified into three broad categories. These are firm characteristics (age, size, and ownership), business competitiveness (export orientation, innovation strategies, and informal competition), and technology upgrade challenges (skills availability, financial constraint, and technology incompatibility). The findings reveal that approximately 11% of firms incurring R&D costs export their products (services). Exportation, skilled labor availability, and degree of informal competition correlate positively and significantly to R&D expenditure. The largest ownership (%) has a marginal effect on the outcome variable. Moreover, firm size substantially influences R&D costs, with small to medium firms incurring lower costs than their larger counterparts. However, firm age, innovation strategy, financial constraint, and technology incompatibility weakly influence the outcome variable. The product innovation strategy’s interaction effect with skills, firm age and informal competition substantially impacts R&D costs. Notably, firms’ R&D spending must be in tandem with the domestic informal competition intensity, skills availability, and foreign market targeted. The study employs the Ordinary Least Squares (OLS) regression in examining the relationship between the predictors and the dependent variable.