Impact of globalization on the Kenyan economy

Introduction

Background of the study

Extreme turbulence in domestic and international markets has been rising in recent years.
There is a lot of turmoil in the world because of globalization. There is now more international
rivalry because of the fast spread of multinational firms across continents. A process of
international integration resulting from cultural, worldview, product, and intellectual exchange is
called globalization, according to Hill and Hult (2016). This has occurred as a result of
improvements in transportation and telecommunications technologies.

Rugman and Collinson (2017) claim that the most severe type of globalization entails
establishing a globally interconnected economic system in its entirety. Financial capital,
products, and people would be perfectly mobile in such a global economy. A company's rising
desire to do business on other continents is called "internationalization." Rapid
internationalization has occurred as a result of globalization. New markets were opened up in the
developed world by companies that had exhausted their market. After first-world markets
become saturated, these corporations are moving quickly to exploit markets in the developing
world, such as Asia, Africa, Latin America, and the Middle East; (Rugman & Collinson, 2017).

According to Aven (2018), the fall of the Soviet Union and the Eastern Bloc in the early
1990s ushered in a surge of global liberalization in most formerly closed economies. Large
corporations have expanded their reach internationally as a result of market liberalization. Policy
shifts from planned economies to free-market systems are known as liberalizations. In these
countries, public companies are being privatized, tariff and non-tariff barriers are being lowered,
and restrictions on foreign investment and economic activity are being eased.

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Kenya started liberalizing its market in 1993, still doing so. Government-led economic
reforms were launched after decades of economic stagnation in the 1980s and 1990s. Economic
initiatives were started by a new finance minister and a new central bank governor. The World
Bank and the International Monetary Fund devised market reform strategies implemented by the
country (IMF). After that, the government lifted all pricing limits, import license requirements,
and currency conversion restrictions. Subsequently, numerous state-owned enterprises and
parastatals were sold off, and the government's workforce was drastically reduced. The
administration also implemented fiscal and monetary measures. This year's GDP growth rate
was an average of 4%. (Bigman, 2020).

Many multinationals have lately entered the Kenyan market at a quick pace. All kinds of
businesses are racing to fulfill the needs of consumers and local businesses, from
telecommunications to food and beverage to electronics to heavy engineering to automobiles
and planes, among many others. Bharti Airtel (India), China Wu Yi Co. (China), and Subway
(USA) are among the multinationals that have recently entered the Kenyan market. Other recent
entrants include General Electric and IBM from the United States, Microsoft from the United
States, Google from the United States, Bharti Airtel from India, and Huawei from China
(Voorpijl, 2018). For developing nations, multinationals from industrialized countries deliver a
variety of advantages, Wild & Wild (2015) asserts. Foreign direct investment, job creation,
infrastructure, technology, and lower manufacturing costs are examples of this. Despite these
benefits, multinationals have several downsides: increased competitiveness, severe
environmental effect, political instability, low-skilled employment, health and safety misuse,
and profit repatriation. In Kenya, globalization has resulted in a lot of upheaval and volatility. It
is also had a slew of both good and bad consequences. Firms from over the world have flooded
the market with large capital expenditures, new technology, talented workers, and enormous

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expertise. The purpose of this study is to examine and comprehend in detail how local
enterprises might adapt to globalization to prevent extinction and achieve a competitive edge.

Problem Statement

The impact of globalization on people's lives and government in Africa has been the
subject of a slew of investigations. For many years now, researchers have been trying to figure
out how multinational corporations, like those in the U.S., might enter emerging countries like
Afri