COUNTRY REGULATORY ENVIRONMENT, MODERATING COUNTRY BRAND CHOICE FOR FOREIGN DIRECT INVESTMENT IN KENYA
Article Sidebar
Main Article Content
Abstract
Choice to locate business internationally is determined by comparison of various countries. The decision to invest may be based on market size, natural and human resources, financial, physical and technological infrastructure, country openness to foreign investment, institutional frameworks and policies such as fair trade, transparency. Countries are now competing to be a favourable destination for foreign direct investment. This has led to country making changes in policicies in order to attract investors. The Kenya investment legislation framework is anchored in Investment Promotion Act (IPA) of 2004. Kenya Investment Authority facilitates both local and foreign investors to obtain licences, permits and certificates. Despite Kenya making chnges on regulatory environment in 2014 based on on UNCTAD (2013) policy recommendations by establishing a one stop shop at Kenya Investment Authority to market and facilitate both local and foreign investors, investors chose Ethiopia over Kenya and Ethiopia remained the largest recipient of FDI in East Africa. Foreign Direct Investment (FDI) inflows in Kenya declined by 18% in the year 2019, This implied that Kenya was losing its competitiveness in attracting foreign direct investment. This study focused on the Kenya investment policy review recommendations by UNCTAD (2013). It measured the extent to which six policies (tax policy, competition policy, governance policy, environment policy, infrastructure and human capital policy) are moderating the relationship between country marketing mix and country brand choice for FDI. Findings indicated that both country marketing mix and country regulatory environment are statistically significant. The interaction term between country marketing mix and country regulatory environment is significant, with a negative B coefficient. This indicated that unfavourable regulatory environment moderates the effect of marketing negatively. An increase in unfavourable environment will result in the decrease of the likelihood that a country will be chosen of foreign direct investment. The study concluded that an increase in favourable country regulatory environment results in an increase in likelihood that an investor will choose a country for Foreign Direct Investment (FDI). Therefore, the study concluded that there is a statistically significant relationship between country regulatory environment and country brand choice, and that country regulatory environment has a significant moderating effect on the relationship between country marketing mix and country brand choice for foreign direct investment in Kenya. Unfavourable regulatory environment moderates the effect of marketing efforts negatively. An increase in unfavourable environment will result in the decrease of the likelihood that a country will be chosen of foreign direct investment.
Article Details
References
Aaker, D. A. & Joachimsthaler, E. (2000). ‘Brand leadership.’ Journal of Brand Management, 7(6), 451–453. https://doi.org/10.1057/bm.2000.38
Aliyu, A. A., Bello, M. U., Kasim, R., & Martin, D. (2014). Positivist and Non-Positivist Paradigm in Social Science Research: Conflicting Paradigms or Perfect Partners? Journal of Management and Sustainability, 4(3), 79–95. https://doi.org/10.5539/jms.v4n3p79
Anholt, S. (2008). Practitioner Insight: From nation branding to competitive identity-the role of brand management as a component of national policy. In Nation branding: concepts, issues, practice.
Baron, R. M., & Kenny, D. A. (1986). The Moderator-Mediator Variable Distinction in Social Psychological Research. Conceptual, Strategic, and Statistical Considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182. https://doi.org/10.1037/0022-3514.51.6.1173
Bartlett II, J. E., Kotrlik, J. W., & Higgins, C. C. (2001). Determing appropriate sample size in survey research. Information Technology, Learning, and Performance Journal, 19(1), 43–50. https://www.opalco.com/wp-content/uploads/2014/10/Reading-Sample-Size1.pdf
Benson A ateng, R. A. (2017). Constraints To Foreign Direct Investment Inflows To Kenya : Stakeholders ’ Perspective By. International Journal Of Education and Research, 5(10), 1–10.
Bose, S., Roy, S. K., & Tiwari, A. K. (2016). Measuring customer-based place brand equity (CBPBE): an investment attractiveness perspective. Journal of Strategic Marketing, 24(7), 617–634. https://doi.org/10.1080/0965254X.2016.1148766
Chattopadhyay, T., Shivani, S., & Krishnan, M. (2010). Marketing mix elements influencing brand equity and brand choice. Vikalpa, 35(3), 67–84. https://doi.org/10.1177/0256090920100305
Chib, S., Seetharaman, P. B., & Strijnev, A. (2004). Model of brand choice with a no-purchase option calibrated to scanner-panel data. Journal of Marketing Research, 41(2), 184–196. https://doi.org/10.1509/jmkr.41.2.184.28674
David A Aaker_. (1996). Building Strong Brands.
David A Aaker_. (2003). The power of branded differentiator. MIT Sloam Management Review, 45(116), 83–87.
Fuchs, Matthias, Tatiana Chekalina, M. L. (2012). Destination brand equity modelling and measurement – a summer tourism case from Sweden. The European Tourism Research Institute (ETOUR), January, 1–32.
Future Brand. (2014). Country Brand Index 2014-15. In Future Brand.
Gartner, W. C., & Ruzzier, M. K. (2011). Tourism Destination Brand Equity Dimensions : Renewal versus Repeat Market. Journal of Travel Research, 50(5), 471–481. https://doi.org/10.1177/0047287510379157
Gómez, O., C, M., & PÉREZ, G. (2019). Brand equity as a determinant of product purchase and repurchase intention. Revista Espacios, 40(35), 7.
Hanna, S., & Rowley, J. (2013). Place brand practitioners’ perspectives on the management and evaluation of the brand experience. Town Planning Review, 84(4), 473–493. https://doi.org/10.3828/tpr.2013.25
Hellier, P. K., Geursen, G. M., Carr, R. A., & Rickard, J. A. (2003). Customer repurchase intention. European Journal of Marketing, 37(11/12), 1762–1800. https://doi.org/10.1108/03090560310495456
International Finance Corporation. (2019). CREATING MARKETS IN CREATING MARKETS IN Unleashing Private Sector Dynamism to Achieve Full Potential.
Išoraitė, M. (2016). P) IF: 4.321 (CosmosImpactFactor), 2.532 (I2OR) Cite This Article: Margarita Išoraitė. International Journal of Research-Granthaalayah, 4(6), 25–37. https://doi.org/10.5281/zenodo.56533
Kalampokis, E., Karamanou, A., Tambouris, E., & Tarabanis, K. (2016). Applying Brand Equity Theory to Understand Consumer. Journal of Universal Computer Science, 22(5), 709–734.
Kang, M., & Yang, S. U. (2010). Comparing effects of country reputation and the overall corporate reputations of a country on international consumers product attitudes and purchase intentions. Corporate Reputation Review, 13(1), 52–62. https://doi.org/10.1057/crr.2010.1
Kavaratzis, M., & Ashworth, G. (2008). Place marketing: How did we get here and where are we going? Journal of Place Management and Development, 1(2), 150–165. https://doi.org/10.1108/17538330810889989
Keninvest Authority. (2022). Promoting Investments in Kenya: S t r at e g i c p l a n 2018-2022.
Kinyuru, R., Muathe, N., Makau, S., & Kerre, F. P. (2014). the Moderating Effect of Industrial Context on the Relationship Between Brand Equity and Consumer Choice in Branded Bottled Water Nairobi, Kenya. European Scientific Journal, 10(4), 1857–7881.
Koenig, H. F., Mishra, C. S., Gobeli, D. H., Koenig, H. F., Mishra, C. S., & Gobeli, D. H. (2002). Creating Brand Equity Through Strategic Investments. Euromoney Institutional Investor PLC, 5(2), 45–52.
Mcalexander, J. H., Schouten, J. W., Koenig, H. F., Mcalexander, J. H., Schouten, J. W., & Koenig, H. F. (2002). Building Brand Community. Journal of Marketing, 66(1), 38–54.
Medway, D., & Warnaby, G. (2008). Alternative perspectives on marketing and the place brand. European Journal of Marketing, 42(5–6), 641–653. https://doi.org/10.1108/03090560810862552
Nielsen, B. B., Asmussen, C. G., & Weatherall, C. D. (2017). The location choice of foreign direct investments: Empirical evidence and methodological challenges. Journal of World Business, 52(1), 62–82. https://doi.org/10.1016/j.jwb.2016.10.006
Papadopoulos, N., Hamzaoui-Essoussi, L., & El Banna, A. (2016). Nation branding for foreign direct investment: An integrative review and directions for research and strategy. Journal of Product and Brand Management, 25(7), 615–628. https://doi.org/10.1108/JPBM-09-2016-1320
Papadopoulos, N., Ibrahim, Y., De Nisco, A., & Napolitano, M. R. (2018). The Role of Country Branding in Attracting Foreign Investment: Country Characteristics and Country Image. Mercati & Competitività, 2, 85–108. https://doi.org/10.3280/mc2018-002005
Pappu, R., Quester, P. G., & Cooksey, R. W. (2007). Country image and consumer-based brand equity: Relationships and implications for international marketing. Journal of International Business Studies, 38(5), 726–745. https://doi.org/10.1057/palgrave.jibs.8400293
Pike, A., & Anholt, S. (2013). Beyond the Nation Brand: The Role of Image and Identity in International Relations. Brands and Branding Geographies, 1–7. https://doi.org/10.4337/9780857930842.00027
Prado, F., & Trad, N. (2018). The World’s Most Reputable Countries 2018 Country RepTrak®. 39.
Queiroz, L. De, & Giraldi, E. (2015). Country brand equity : a comparison between the USA and China. 17(57), 1193–1211. https://doi.org/10.7819/rbgn.v17i57.1964
Ryan, G. (2018). Introduction to positivism, interpretivism and critical theory. Nurse Researcher, 25(4), 14–20. https://doi.org/10.7748/nr.2018.e1466
Saunders, M., Lewis, P., & Thornhill, A. (2009). Understanding research philosophies and... In Pearson Educcation (Ed.), Research Methods for Business Students (Issue January 2009, pp. 122–161). https://www.researchgate.net/publication/309102603_Understanding_research_philosophies_and_approaches
Sikander Ali Qalati1, Li Wenyuan, GyamfiYeboah Kwabena, Daria Erusalkina, S. P. (2019). Influence of Brand Equity on Brand Performance : Role of Brand Reputation and Social Media. International Journal of Research and Revision, 3(9), 304–317. https://doi.org/10.4444/ijrr.1002/1382
Swait, J., Erdem, T., & Swait, J. (2007). Brand Effects on Choice and Choice Set Formation Under Uncertainty. Marketing Science, 26(5), 679–697. https://doi.org/10.1287/mksc.l060.0260
Szwajca, D. (2017). The Importance of reputation of a country in the process of Building its competitive advantage on the Global Market. Scientific Journal WSFiP Nr, 1, 99–114. https://doi.org/10.19192/wsfip.sj1.2017.7
Taherdoost, H. (2016). Sampling Methods in Research Methodology; How to Choose a Sampling Technique for Research. SSRN Electronic Journal, 5(2), 18–27. https://doi.org/10.2139/ssrn.3205035
Taleghani, M., & Almasi, M. (2012). Evaluate the Factors Affecting Brand Equity from the Perspective of Customers Using Aaker’s Model. SSRN Electronic Journal, 1(4), 64–76. https://doi.org/10.2139/ssrn.1944550
Toroitich, I., Kibet, Y., & Bogonko, J. (2016). Effect of Promotional Strategy on Brand Preference of Branded Products of Kenya Co-Operative Creameries Limited. 18(11), 42–61. https://doi.org/10.9790/487X-1811064261
UNCTAD. (2017). Investment Facilitation : The Perfect Match for Investment Promotion. In The IPA Observer (Issue 6).
UNCTAD. (2020). World Investment Report International Production Beyond The Pandemic 2020.
Wekesa, C. T., Wawire, N. H., & Kosimbei, G. (2016). Effects of Infrastructure Development on Foreign Direct Investment in Kenya. Journal of Infrastructure Development, 8(2), 1–18. https://doi.org/10.1177/0974930616667875
Zenker, S., & Braun, E. (2017). Questioning a “one size fits all” city brand: Developing a branded house strategy for place brand management. Journal of Place Management and Development, 10(3), 270–287. https://doi.org/10.1108/JPMD-04-2016-0018