Technological Innovation and Financial Performance of Small-Scale Tea Industry in Kenya

Abstract

The Agricultural sector in Kenya has been facing the challenge of increased costs as a result of outdated technology. In an attempt to reduce its costs, the tea sector has invested heavily in technology. The purpose of this study was to establish the effect of technological innovation investment on financial performance of small-scale tea industry in Kenya. The study variable was investment on fermentation innovation on the financial performance of small-scale tea firms in Kenya. This study was anchored on; Schumpeterian Theory on Innovations, Efficiency Theory, Technology Acceptance Model and Theory of Innovation Diffusion. The targeted population was 66 small scale tea factories. Secondary data for a period of 5 years was used for analysis using a panel regression model. Person correlation results indicated that investment on investment technological innovations, are positively and significantly associated with financial performance of small-scale tea industry. Innovations affect the financial performance of small-scale tea firms. The study recommends the management can consider acquiring more fermentation machinery and modern machinery that can be cost effective.