Determinant of Sale Responce Probability and Tourism Backward Linkage with Local Micro and Small Enterprises in Kisumu County

Abstract

Tourism backward linkage with local enterprises in an economy enhances its economic impact. However, high income leakages experienced in Sub Sahara Africa especially in Kisumu County in Kenya indicate limited tourism linkage.  The aim of the study was to find out significant factors explaining extent of tourism backward linkages with economy of Kisumu County and factors influencing the probability of local sales as proportion of total sale surpassing a national government threshold of 30%. A cross section of 106 randomly selected tourism enterprises were conducted in Kisumu County.  Linear probability and multiple regression models were developed to explain variables with significant effects on changes in response probability and local purchase ratio respectively. It was established that local purchase ratio in rural areas of Kisumu County was higher than that obtaining in outskirts of Kisumu Town and central business district of Kisumu Town by 15.3%. Increasing number of employees in local supplier businesses and rate of weekly local suppliers reduced the probability of sale of such supplier exceeding national threshold by 7.4% and 5.3% respectively. But quality of local supplies enhanced the probability of exceeding the threshold by 8.8%.  In conclusion, location of tourism enterprises affected tourism backward linkages with local businesses. Though quality of local supplies enhanced penetration of local business activities in tourism sector, the number of employees in suppliers` enterprises and higher rate of supplies depressed it.