International Journal of Social Science & Economic Research
Submit Paper

Title:
INFORMAL CROSS BORDER TRADE AND ITS EFFECTS ON KENYAN HOUSEHOLDS’ POVERTY LEVELS, EVIDENCE OF BUSIA BORDERKENYA

Authors:
Mark Ijah Epus , Dr. Edwin Jairus Simiyu, PHD , Dr. Umulkher Abdillahi Ali, PHD and Dr. Consolata Ngala, PHD

|| ||

Mark Ijah Epus1 , Dr. Edwin Jairus Simiyu, PHD2 , Dr. Umulkher Abdillahi Ali, PHD3 and Dr. Consolata Ngala, PHD4
1. Msc Economics Candidate , Department of Economics, Masinde Muliro University of Science & Technology
2,3,4. Department of Economics, Masinde Muliro University of Science & Technology

MLA 8
Epus, Mark Ijah, et al. "INFORMAL CROSS BORDER TRADE AND ITS EFFECTS ON KENYAN HOUSEHOLDS’ POVERTY LEVELS, EVIDENCE OF BUSIA BORDERKENYA." Int. j. of Social Science and Economic Research, vol. 7, no. 10, Oct. 2022, pp. 3233-3258, doi.org/10.46609/IJSSER.2022.v07i10.002. Accessed Oct. 2022.
APA 6
Epus, M., Simiyu, D., Ali, D., & Ngala, D. (2022, October). INFORMAL CROSS BORDER TRADE AND ITS EFFECTS ON KENYAN HOUSEHOLDS’ POVERTY LEVELS, EVIDENCE OF BUSIA BORDERKENYA. Int. j. of Social Science and Economic Research, 7(10), 3233-3258. Retrieved from https://doi.org/10.46609/IJSSER.2022.v07i10.002
Chicago
Epus, Mark Ijah, Dr. Edwin Jairus Simiyu, Dr. Umulkher Abdillahi Ali, and Dr. Consolata Ngala. "INFORMAL CROSS BORDER TRADE AND ITS EFFECTS ON KENYAN HOUSEHOLDS’ POVERTY LEVELS, EVIDENCE OF BUSIA BORDERKENYA." Int. j. of Social Science and Economic Research 7, no. 10 (October 2022), 3233-3258. Accessed October, 2022. https://doi.org/10.46609/IJSSER.2022.v07i10.002.

References

[1]. Afrika, J. G., &Ajumbo, G. (2012). Informal cross border trade in Africa: Implications and policy recommendations. Africa EconomicBrief,3(10), 1-13.
[2]. AKKU?,G.(2014).TheeffectsoftradeandproductivityonemploymentinthemanufacturingindustryofTurkey. ?stanbulÜniversitesi?ktisatFakültesiMecmuas?,64(2), 1-44.
[3]. Akyüz, L. (2017). Ethnicity, Gender and the Border Economy: Living in the Turkey-Georgia Borderlands. Routledge.
[4]. Allen, E. P., Muhwezi, W. W., Henriksson, D. K., &Mbonye, A. K. (2017). Health facility management and access: a qualitative analysis of challenges to seeking healthcare for children under five in Uganda.Health policyandplanning, 32(7), 934-942.
[5]. Aluoch, P. D. (2014). Complexities of informal cross border trade: Vulnerabilities and coping strategies among traders in Namanga, Kenya. Unpublished Master Dissertation), International Institute of Social Studies. The Hague: Netherlands.
[6]. Arp,F.,Ardisa,A.,&Ardisa,A.(2017).Microfinance for poverty alleviation: Do transnational linitiatives overlook fundamental questions of competition and intermediation? Transnational Corporations, 24(3), 103-117.
[7]. Bhattacherjee, A. (2012). Social science research: Principles, methods, and practices.Bensassi,S.,Jarreau,J.,&Mitaritonna,C.(2019).Regiona lintegration and informal trade in Africa: Evidence from Benin’s borders. Journal of AfricanEconomies,28(1),89-118.
[8]. Bensassi,S.,&Siu,J.(2021).Quantifying missing and hidden trade: An economic perspective. In The Routledge Handbook of Smuggling(pp. 61-76).Routledge.
[9]. Berisha,E.,&Meszaros,J.(2020).Macroeconomicdeterminantsofwealthinequalitydynamics.EconomicModelling, 89, 153-165.
[10]. Blanchard,E.,&Willmann,G.(2016). Trade, education, and the shrinking middleclass. Journal of International Economics, 99, 263-278.
[11]. Blanchard, E. J.,& Olney, W.W. (2017). Globalization and human capital investment: Export composition drives educational attainment. Journal of International Economics, 106, 165-183.
[12]. Chani, C. (2008). Informal cross–border trade: a review of its impact on household poverty eduction (Zimbabwe) (Doctoral dissertation,University of FortHare).
[13]. Chijioke, O. C., Aloysius, A., & Obi, D. O. (2021). Mercantilism in perspective: A historic review.Global Economy Journal, 21(01), 2150001.
[14]. Chikanda,A.,&Raimundo,I.(2017).Informalentrepreneurshipandcross-bordertradebetweenMozambiqueand South Africa. AfricanHumanMobilityReview,3(2).
[15]. Choi, J. A., & Kim, O. (2021). Factors influencing unmet healthcare needs among older Korean women. International Journal of Environmental Research and Public Health, 18(13), 6862.
[16]. Cooper, D. R., Schindler, P. S., & Sun, J. (2006). Business research methods (Vol. 9, pp. 1-744).New York: Mcgraw-hill.
[17]. Dane,F.C.(2017).Evaluating research: Methodology for people who need to read research (2ndE.d).SAGE Publications,Inc
[18]. Das,R.C.,&Ray,K.(2020).Doesglobalisationinfluenceemployment?Empiricalinvestigation on individual as well as panel of South Asian Countries. Review of Market Integration, 12(1-2), 7-34.
[19]. De Vos, A. S. (2005). Qualitative data analysis and interpretation. Research at grass roots: For the social sciences and human service professions, 3(1),333-349.
[20]. Dihel, N., & Goswami, A. G. (2016). The unexplored potential of trade in services in Africa. Faleye,O.A.(2014).Impact of Informal Cross Border Trade on Poverty Alleviation in Nigeria: Kotangowa Marke t[Lagos] in Perspective. Crossing the Border: International Journal of Interdisciplinary Studies, 2(1), 13-22.
[21]. Farhikhteh, S., Kazemi, A., Shahin, A., &Shafiee, M. M. (2020). How competitiveness factors propel SMEs to achieve competitive advantage? Competitiveness Review: An International Business Journal, 30(3),315-338.https://doi.org/10.1108/CR-12-2018-0090
[22]. Greenland,A.,&Lopresti,J.(2016).Import exposure and human capital adjustment: Evidence from the US. Journal of International economics, 100, 50-60.
[23]. Golub,S.(2015).Informal cross-border trade and smugglingin Africa. In Handbookon Trade and Development. Edward Elgar Publishing.
[24]. González,A.S.,&Lamanna,F.(2007).Who fears competition from informal firms? Evidence from Latin America.
[25]. Golafshani,N.(2003).Understanding reliability and validity in qualitative research. The qualitative report, 8(4), 597-607.
[26]. Hall, A. (2013), Introductory remarks on possible IBM approaches to small and informal cross-border trade, presented at the Roundtable on“ Promoting Integrated Border Management (IBM) in Latin America and sub-Saharan Africa”, Organised by the European Commission In cooperation with the International Centre for Migration Policy Development (ICMPD), 10-11 Brussels.
[27]. Hastings, J.V., & Wang, Y. (2018). Informal trade along the China–North Korea border. Journal of East Asian Studies, 18(2), 181-203.
[28]. Heath, T. R., & Thompson, W. R. (2018). Avoiding US-China competition is futile: Why the best option is to manage strategicrivalry. asia policy, 13(2), 91-120.
[29]. Higgins,K.(2012).Gender dimensions of trade facilitation and logistics: A guidance note.
[30]. Islam, M. M., Li, Z., & Fatema, F. (2017). The effects of sectoral trade composition on inequality: evidence from emerging economies. Asian Journal of Empirical Research, 7(8), 202-224.
[31]. Kahiya, E., &Kadirov, D. (2020). Informal cross border trade as a substratum marketing system: a review and conceptual framework. Journal of Micromarketing, 40(1), 88-109.
[32]. KarakireGuma, P. (2015). Business in the urban informal economy: Barriers to women’s entrepreneurship in Uganda. Journal of African Business, 16(3),305-321.
[33]. Kawala, M., Hyuha, T. S., William, E., Walekwa, P., Elepu, G., &Kalumba, S. C. (2018).Determinants for choice of fish market channels: The case of Busia (Uganda/Kenya)border. Journal of Agricultural Science, 10(8), 118.
[34]. Kotrlik,J.W.K.J.W.,&Higgins,C.C.H.C.C.(2001).Organizationalresearch:Determining appropriate sample size in survey research appropriate sample size in survey research. Information technology, learning, and performance journal, 19(1),43.
[35]. Kumar,R. (2018).Research methodology: Astep-by-step guidefor beginners. Sage.
[36]. Li, J., Shi, L., Liang, H., Ma, C., Xu, L., & Qin, W. (2019). Health care utilization and affordability among older people following China’s 2009 health reform—evidence from CHARLS pilot study. International journal for equity in health, 18(1),1-9.
[37]. Liu, M. Y. (2017). How does globalization affect educational attainment? Evidence from China. Technical report.
[38]. Luke,D.,Masila,G.,&Sommer,L.(2020).Informaltraders:Abalancingactofsurvival.African Bus, 1-8.
[39]. Manirampa,P.(2014). Impact of Informal CrossBorder Trade on the Socio-Economic Development of Small-Scale Traders in Rwanda. Case of Women Informal Cross Border Traders in Rubavu District (Doctoral dissertation, University of Rwanda).
[40]. Mawejje, J., &Nampewo, D. (2018). Food prices, money growth and informal cross-border trade: evidence from Uganda. African Journal of Economic and Management Studies.
[41]. Meoqui, J. M. (2021). Overcoming absolute and comparative advantage: A reappraisal of the relative cheapness of foreign commodities as the basis of international trade. Journal of the History of Economic Thought, 43(3), 433-449.
[42]. Mohamad, M. M., Sulaiman, N. L., Sern, L. C., & Salleh, K. M. (2015). Measuring the validity and reliability of research instruments. Procedia-Social and Behavioral Sciences, 204, 164-171.
[43]. Muga,D.G.(2018). Effects of Informal Cross Border Trade on Growth of Women Entrepreneurial Businesses at the Busia Border (Doctoral dissertation, United States International University-Africa).
[44]. Mugenda,O.,&Mugenda,A.(2003).Research methods: Quantitative and Qualitative methods. Revised in Nairobi, 56(12), 23-34.
[45]. Mugenda,A. (2008). Social science research: Conception, methodology and analysis. Nairobi: Kenya Applied Research and Training Services, 10(1).
[46]. Mutai, K. B. (2000). How to write quality research proposals (1st ed.). New Delhi: Thellery Publications
[47]. Mutsagondo, S., Karimanzira, E., &Makanga, J. (2016). Ndau women, informal cross-bordertrade and the changing socio-economic dispensation in Zimbabwe. Paradigms, 10(2),1.
[48]. Nakanjako, R., Onyango, E. O., &Kabumbuli, R. (2021). Positioning migrants in informalcross border trade: the case of Busia, Uganda-Kenya border. Eastern Africa Social Science Research Review, 37(1), 123-143.
[49]. Nguyen, H. M., & Nguyen, T. A. (2019). Investigating the determinants of household welfareinthe Central High land,Vietnam.Cogent Economics & Finance,7(1), 1684179.
[50]. Njiwa,D.(2013).Tackling informal cross-border trade in Southern Africa. Bridges Africa, 2(1), 9-11.
[51]. Nkoroi,I.(2015). Assessing the informal cross border trade between Kenya and Uganda (Doctoral dissertation, University of Nairobi).
[52]. Ogalo, V. (2010). Informal cross-border trade in EAC: Implications for regional integration and development. Research Paper: CUTS Geneva Resource Centre.
[53]. Okeke,D.C.,Cilliers,J.,&Schoeman,C.(2018).Neo-mercantilism as development ideology: A conceptual approach to rethink the space economy in Africa. AfricanStudies,77(1), 23-52.
[54]. Patton,M.Q.(1990). Qualitative evaluation and research methods. SAGE Publications, inc.
[55]. Pieterse, M. (2020). Local government law, development and cross-border trade in the globalcities of SADC. Law and Development Review, 13(1), 127-157.
[56]. Ramzan, M., Sheng, B., Shahbaz, M., Song, J.,& Jiao, Z. (2019). Impact of trade openness on GDP growth: Does TFP matter? The Journal of International Trade & EconomicDevelopment,28(8), 960-995.
[57]. Schulze, K., &Blechinger-Talcott, V. (2019). Introduction: Dimensions of Sino–Japaneserivalry in a global context. The Pacific Review, 32(5), 725-747.
[58]. Sperling,L.,Birachi,E.,Kalemera,S.,Mutua,M.,Templer,N.,Mukankusi,C.,...&Rubyogo,J.C.(2021).The Informal Seed Business: Focus on Yellow Bean in Tanzania. Sustainability, 13(16), 8897.
[59]. Struwig,F.W., Nuwagaba, G.,& Krüger,J.(2019).The influence of the business environment on the growth of informal businesses in Uganda. The Southern African Journal of Entrepreneurship and Small Business Management, 11(1), 1-10.Strydom,P.(2011).Contemporary critical theory and methodology. Routledge.
[60]. Tsaliki,P., Paraskevopoulou,C., &Tsoulfidis,L. (2018). Unequal exchange and absolute cost advantage: Evidence from the trade between Greece and Germany. Cambridge Journal of Economics, 42(4), 1043-1086.
[61]. Tyson,J.E.(2018).One-stop border posts and informal livelihoods in Busia, Kenya. Development in Practice, 28(4), 562-573.
[62]. UbbaKodero, C. (2020). Development Without Borders? Informal Cross-Border Trade inAfrica. In The Palgrave Handbook of African Political Economy (pp. 1051-1067).Palgrave Macmillan, Cham.
[63]. Useche, D., Miguelez, E., &Lissoni, F. (2020). Highly-skilled migrants and Cross-border M&A: Firm-level evidence. Journal of International Business Studies,51, 737-763.
[64]. Wiesböck, L., Verwiebe, R., Reinprecht, C., &Haindorfer, R. (2016). The economic crisis asa driver of cross-border labour mobility? A multi-method perspective on the case ofthe Central European Region. Journal of Ethnic and Migration Studies, 42(10), 1711-1727.
[65]. White, H., &Sabarwal, S. (2014). Quasi-experimental design and methods. Methodological briefs: impact evaluation, 8(2014), 1-16.
[66]. Wrigley-Asante, C. (2013). Survival or escaping poverty: The perspectives of poverty and well-being among Ghanaian women in cross-border trading. Journal of Gender Studies, 22(3), 320-334.
[67]. Xheneti, M., Smallbone, D., & Welter, F. (2013). EU enlargement effects on cross-border informal entrepreneurial activities. European urban and regional studies, 20(3), 314-328

ABSTRACT:
Informal cross-border trade is business done by small, unlicensed, vulnerable traders between neighboring nations. This study sort to establish whether informal cross border trade had any effect on the poverty levels of Kenyan’s residing in Kenya -Busia border. Descriptive research design was utilized along with structured questionnaire to collect both qualitative and quantitative primary data. The study targeted 2,400 informal cross border traders from which a sample of 332 households was selected using Cochran’s 1977 formula. Convenience sampling, Cluster and simple random sampling were used to pick households for the study. Qualitative data were subjected to a thematic analysis whereas Quantitative data was analyzed by descriptive and inferential analysis using Statistical Package for the Social Sciences (SPSS) version 2020. The study found out that 33.1% of variation of poverty reduction was explained by informal cross border trade which means that trade had a significant influence on poverty reduction (tstatistic=1.448, p-value=0.002< 0.05). The value of R- squared under general regression was 0.657 hence 65.7% of variations of the Kenyan households’ economic welfare was explained by informal cross border trade and at 0.05 level of significance, households’ welfare was affected by informal cross border trade as denoted by 0.002 which is less than 0.05 level of significance (tstatistic=13.055, p-value=0.002 < 0.05). Proper policies on reduction of tariff and non-tariff barriers, liberalisation of import licensing, removal of foreign exchange restrictions, management of import quotas and export quotas, easing of customs formalities and good utility of the onestop border posts border can reduce informal cross border and legitimize most business involved in it.

IJSSER is Member of