Firm Level Determinants of Investment in the Kenyan Manufacturing Firm

This study uses firm level data to investigate the investment behavior in the Kenyan manufacturing firms. Using Probit and Tobit regression models the results shows that factors determining the decision to invest are different from those determining the share invested. Overall the results shows low levels of investment by Kenyan manufacturing firms and the importance of firm level data in explaining the investment behavior. On the policy front the paper observes the role of government in the provision of stable macroeconomic policies, affordable credit and basic infrastructure in order to attract investment in this sector.