Small Business Economics

, Volume 41, Issue 3, pp 667–681 | Cite as

Micro and small enterprise participation in tourism in coastal Kenya



Small business participation in tourism can help diversify income and contribute to poverty reduction in some circumstances. We examined micro and small enterprise (MSE) participation in tourism and the linkages between tourism businesses and MSEs in the coastal region of Kenya, using data from two surveys involving 449 MSEs and 49 hotels. Tobit regression was used to estimate the determinants of MSE participation in tourism, as well as the proportion of products purchased by hotels from MSEs. The results indicated that older, larger MSEs and those that were members of associations were more likely to participate in tourism. The determinants of hotel procurement from MSEs included age of the hotel, bed capacity, and management characteristics. The results highlight the opportunities and barriers for MSE participation in tourism and have implications for policies related to sustainable tourism development, regional economic development, and enhancement of rural livelihoods.


Micro enterprises Small business participation Tourism Economic linkages Kenya 

JEL Classifications

L25 L83 L26 O17 



We are grateful for funding support from DAAD (Deutscher Akademischer Austausch Dienst, or the German Academic Exchange Service) and USAID (United States Agency for International Development) through the HEPAD (Higher Education Partnership for African Development) program. We are also grateful to the hotel managers, MSE owners, and other entrepreneurs who were willing to share their information with us. This paper benefitted from the comments of two anonymous reviewers.


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Copyright information

© Springer Science+Business Media, LLC. 2012

Authors and Affiliations

  1. 1.Department of Agricultural Economics and Agribusiness ManagementEgerton UniversityNjoroKenya
  2. 2.Department of Community, Agriculture, Recreation and Resource StudiesMichigan State UniversityEast LansingUSA

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