Abstract: The study sought to examine the effect of economic environment factors on the performance of Nairobi County’s small and medium enterprises in Kenya. Open system theory and balanced scorecard theory served as the study's foundations. Descriptive design was used. Targeted population constituted five hundred and thirty-two (532) of these businesses in Nairobi County, Kenya. A sample size of one hundred and fifty (150) firms was chosen utilizing stratified simple random sampling techniques, with the owners or managers acting as the participants in the survey. Information from primary and secondary sources was used. Structured, closed-ended surveys were the main tool used to gather data; a document review guide was utilized to get secondary information from these businesses' financial records between 2018 and 2023. The study instrument's validity and dependability was examined. To examine the data, both descriptive and inferential statistics was utilized. The researcher utilized a panel regression analysis. Autocorrelation, heteroscedasticity, multicollinearity and normality assessment were performed as tests for diagnostic. All ethical considerations were duly followed. Finding demonstrated that taxation possess an inverse and insignificant effect on the enterprises financial performance; inflation revealed a significantly positive effect on the enterprises financial performance; government laws and policy demonstrated also significant positive effect on the enterprises financial performance; Furthermore, government activity disclosed an insignificant but positive effect on the financial performance of these enterprises.
Keywords: Macroeconomic Environment, Financial Performance, Small and Medium Enterprises.
Title: MACROECONOMIC ENVIRONMENT AND FINANCIAL PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN NAIROBI CITY COUNTY, KENYA
Author: Abuswaleh Abdi Guyo, Nathan M. Mutwiri
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Vol. 13, Issue 1, April 2025 - September 2025
Page No: 106-120
Research Publish Journals
Website: www.researchpublish.com
Published Date: 03-June-2025
