Abstract:
Maritime transport remains backbone of globalized
trade and manufacturing supply chain, as more than 80% of
world merchandise trade by volume is carried by sea. Maritime
transport in Kenya takes care of 90% of Kenya’s international
trade by volume. The objective of this study was to establish
effect of labor productivity on maritime sector performance in
enhancing economic growth in Kenya. Target population was
Kenya Ports Authority and Kenya Ferry Services while Kenya
Maritime Authority coordinated implementation of policies
relating to maritime affairs. The study was guided by the Solow
growth model and the production theory. The study adopted
explanatory research design employing panel data using data
on annual basis over the period 2000-2019. Simple Linear
Regression and GMM Models were utilized. Using STATA 13.0
and applying Simple Regression model, results indicated that
coefficient of foreign exchange rate was 3.5694 which was
positive and significant at 5% level, , implying
every
one percent increase in coefficient of foreign exchange
rate, output increased by 3.5694%.
Applying GMM, results
indicated that coefficient of foreign exchange rate was positive
and significant at 5% level of significance,
implying that for every increase in 1% of foreign exchange rate,
output production increased by 3.2744%. On comparing
results using Simple Regression and GMM models, effect and
direction were the same with slight differences in quantity of
coefficient of foreign exchange. Policy makers could consider
improving on policies which could strengthen foreign
exchange rate in order to increase output in maritime sector in
Kenya.
