The Effect of Economies of Scale on Export Performance of Kenya’s Avocado Industry

Abstract

Export promotion of the Avocado industry is essential for countries looking to tap into international markets. While developed and emerging market countries continue to promote their Avocado varieties for export, most developing countries, such as Kenya, struggle with how best to exploit economies of scale for enhanced export. The objective of this study was to investigate the impact of economies of scale on the export performance of Kenya’s avocado industry. The study was anchored on the Resource-Based View and adopted a cross-sectional research design. The targeted population was 137 Avocado export firms in Kenya. A census technique was employed, and a structured questionnaire was formulated and uploaded to Google Forms. A link was shared with respondents. Stata version 17 was used to compute descriptive statistics and Multiple Linear Regression and Pearson Correlation analysis was employed to test statistical association. Findings established that economies of scale have a positive influence on export performance of Kenya’s Avocado industry. Larger firms benefit from cost savings, advanced technology adoption, and better negotiation power (mean=3.6). The highest-rated factor was the role of innovation in reducing costs and improving product quality (mean = 3.8). Pearson correlation analysis (r=0.330, p=0.000) and linear regression results (B=0.212, p=0.000) demonstrated that economies of scale enhance firms’ export performance through operational efficiency and resource optimization. The paper concludes that economies of scale enhance cost effectiveness, thus making Avocado exports competitive in the global markets. The need for sustained investment in Avocado value addition is recommended so that exports meet international standards.