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Abstract
Using the most recent enterprise survey data of the World Bank(2006), this paper investigates
the factors influencing firm performance and survival after the promulgation of the East African
Community (EAC). The major findings of the paper include: (i)The EAC has adversely affected the
survival of small and young firms; (ii) large manufacturing firms are consolidating their position
in the EAC market by exploring the increased market size and information technology to increase
their output and value added per worker; (iii) Exporters, especially to the advanced markets,
have a higher chance of survival compared to the non-exporters. It was also evident that firm
size, age, ownership, and business experience of the manager do significantly influence the firm’s
performance. Government policies should aim at improving the macroeconomic environment in
which manufacturing firms operate so as to reap the benefits of the EAC and increase the chances of
firm survival. Specifically, there is need for government policy to create more industrial parks, solve
the problem of electricity power outages, and encourage the penetration of information technology
across the country.