WBES Data Analysis: Factors Affecting Business Expansion in South Africa and Kenya

This report analyzes the data set provided by the World Bank Enterprise Survey (WBES) to explore the obstacles faced by businesses in South Africa and Kenya. The report selects factors affecting business expansion and analyzes the data to provide recommendations for success. The report includes descriptive and regression analysis for both countries.

WBES data analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
a. Exploring the data to understand the information given by WBES.........................................3
b. Selecting the factors that will be analysed for getting the required information for the
company.......................................................................................................................................4
c. Analysing the data for the selected question............................................................................5
d. Highlighting the findings.........................................................................................................8
e. Making recommendation to company relating to possible impact of these factor..................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
WBES is an acronym for World Bank Enterprise Survey. WBES is a team of economists
that conducts surveys for business enterprises. This report will get the data set providing
obstacles that are faced by businesses while operating in various countries. The report will
analyse the data to gather the understanding required by the company. Various factors will be
selected in the report that affects the working of a business enterprise. Using the appropriate
summary statistic, the data will be analysed on the basis of factors selected. The findings will be
highlighted in the report. The report will make the recommendation for the organization
regarding the possible factors that affects the performance and success of the organization.
MAIN BODY
a. Exploring the data to understand the information given by WBES
The data set given by the World Bank Enterprise Survey is based on the various obstacles
that a business organization will face when I will enter to a complete new market in a new
country by establishing the business in that particular country. The given data is for two
countries namely, South Africa and Kenya.
Having the correct set of data regarding the aspects that can affect the process of
establishment, and growth probability in relation to effective survival and progress of business is
very essential (Nilsen and et.al., 2019). Data helps to know in advance all the possible outcomes
that the company can experience during its effective start up plan in new business environment.
The data provided by the WBES provides various questions like what will be the annual
sales in total for the new establishment and will the establishment be able to compete with the
establishment that are not registered or operates informally. Further, the another question is
regarding the percentage of establishment’s electricity comes from the generator that are owned
by the establishment. There are many other questions too.
Various factors such as labour regulation, tax rates, etc. are assessed based on these
questions to know which factor affects the particular case present by the question. Assessment of
external factors for establishing a business branch in South Africa will be done. The analysis is
done with the view to know the effect of the selected factors over the establishment decision.
Well understanding regarding the impact of factors will help in minimizing the adverse impact
through effective measures and strategies (Yustina, Halim and Mahadi, 2020). Also, the factors

that are in the favour of the establishment can be used in order to experience the maximum
possible benefits.
b. Selecting the factors that will be analysed for getting the required information for the company
 Access to Finance: For establishing a new unit in the South Africa the company will
most importantly requires adequate amount of funds. The success of the establishment
can be assured only when the obstacle of unavailability of funds due to absence of
effective sources of finance to raise funds is non-existent.
 Customs and Trade Regulations: Customs are the payments that are to be made by the
company for entering into South Africa for starting the business (Putra, 2019). Trade
regulations refers to the regulatory framework comprising of the laws related to the
working of a foreign business in South Africa. Excessive amount of custom duties and
complexities in the trade regulations will entail negative impact over the branch
establishment.
 Tax Rates: Tax are imposed and to be paid during the purchase of raw materials,
machinery and other equipment and also on the income generated through the sales of
products and services. High tax rates will make the established less attractive.
 Political Instability: Political instability has its impact over the business operations. The
profits of the company will be effected by the political environment of the country. If the
political environment will be stable, then the business operations can be run smoothly
without hindrance. And the instability in the political functions will impact the business
operations adversely (Erlangga, 2022). Establishment country having good political
relations with the neighbouring countries will enable the company to import the required
materials from the neighbour nations and also export its finished goods to those nations.
Providing more opportunities for the established branch for growth.
 Corruption: Corruption is the term used for exertion of unethical or dishonest conduct by
the authoritarian units of the country. High corruption level will require the establishing
branch to bribe the governing authorities for its effective survival. This will result in
incurrence of extra costs for the company making the profits low. Thus the level of
corruption indirectly impacts the operations of a business enterprise. Higher the level of
corruption lowers the earnings of the company.

 Business Licensing Permit: Licenses and permits are issued by the government of the
South Africa to allow and legalise the operations of corporates in the country. Licenses
and permits are issued by the governing body of the country following the policies it has
in relation to foreign trade and commerce. Countries allowing free movement of foreign
investment impose low restrictions and gives licensing permitting the entry of firm in the
country (Basias and Pollalis, 2018). On the other hand, if the country’s governing body
believes that the local companies should be supported by elimination of competition by
the foreign companies then the government is its policies assures that the restrictions are
imposed for controlling the foreign establishments entering the local market. It retrains
from the licensing permits being given to the outside companies.
c. Analysing the data for the selected question
Descriptive analysis
Over the
course of this
fiscal year,
did this
establishment
own or share
a generator?
Access
to
finance
Customs
and trade
regulations
Tax
rates
Business
Licensing
Permit
Political
instability Corruption
Mean 1.36463 1.74294 1.28077 1.42753 1.37101 1.83865 1.76117
Standard
Error 0.0146 0.0318 0.01744 0.02163 0.01973 0.03912 0.03672
Median 1 1 1 1 1 1 1
Mode 1 1 1 1 1 1 1
Standard
Deviation 0.48344 1.05311 0.5775 0.71639 0.65346 1.29585 1.21631
Sample
Variance 0.23371 1.10904 0.33351 0.51322 0.42701 1.67923 1.4794
Kurtosis -1.5914 0.45226 4.60917 4.19225 5.26158 0.37301 0.80669
Skewness 0.58751 1.2225 1.96407 1.93381 2.05752 1.32256 1.44608
Range 2 5 5 5 5 5 5
Minimum 1 0 0 0 0 0 0
Maximum 3 5 5 5 5 5 5
Sum 1497 1912 1405 1566 1504 2017 1932
Count 1097 1097 1097 1097 1097 1097 1097

With the help of the above analysis of the descriptive statistics it is clear that the different
factors affect the working efficiency of the company and the expansion as well. this is pertaining
to the fact that when the company expand the business within another country then they have to
consider several factors. The most common factor which create an obstacle within the process of
expansion is not any. This is because of the reason that the mode of every factor is 12 which
denotes no obstacle. Hence, this implies that when the company will expand the business in
South Africa then there will not be any obstacle being faced by the company.
Regression analysis
H0- There is not any significant impact of changes in factors on business expansion.
H1- There is significant impact being created of the changes in factor over the business
expansion.
Regression
Statistics
Multiple R 0.20758
R Square 0.04309
Adjusted R
Square 0.03782
Standard
Error 0.47421
Observations 1097
ANOVA
df SS MS F
Significance
F
Regression 6 11.0372 1.83954 8.18039 1.1E-08
Residual 1090 245.11 0.22487
Total 1096 256.148
Coefficients
Standard
Error t Stat P-value
Lower
95%
Upper
95%
Lower
95.0%
Upper
95.0%
Intercept 1.12159 0.04178 26.8465 3E-122 1.03961 1.20356 1.03961 1.20356
k30 0.0225 0.01597 1.4091 0.15909 -0.0088 0.05383 -0.0088 0.05383
d30b 0.05766 0.02871 2.0084 0.04485 0.00133 0.11398 0.00133 0.11398
j30a 0.10964 0.02828 3.8765 0.00011 0.05414 0.16513 0.05414 0.16513
j30c 0.04455 0.03062 1.45462 0.14606 -0.0155 0.10464 -0.0155 0.10464
j30e -0.0539 0.02415 -2.2334 0.02572 -0.1013 -0.0066 -0.1013 -0.0066

j30f 0.00657 0.02515 0.26122 0.79397 -0.0428 0.05591 -0.0428 0.05591
Further with help of the regression analysis it is clear that the R is 20 % and this simply
means that the performance of the company is 20 % dependent over these factors. Further the R
square is 4.3 % which implies that any change in independent factor will cause a very low
change in the dependent factor (Maulud and Abdulazeez, 2020). Further the significance value is
less than the standard that is 0.05. this emphasises the fact that alternate hypothesis is being
accepted rejecting the null. This in turn means that these different factors affect the performance
of company at time of business expansion.
Kenya
Regression
Statistics
Multiple R 0.11322
R Square 0.01282
Adjusted R
Square 0.00689
Standard
Error 0.48684
Observations 1006
ANOVA
df SS MS F
Significance
F
Regression 6 3.07448 0.51241 2.16201 0.04442
Residual 999 236.771 0.23701
Total 1005 239.846
Coefficients
Standard
Error t Stat P-value
Lower
95%
Upper
95%
Lower
95.0%
Upper
95.0%
Intercept 1.2319 0.05371 22.9374 7.1E-94 1.12651 1.33729 1.12651 1.33729
Access to
finance
(k30) -0.0095 0.00571 -1.6686 0.09552 -0.0207 0.00168 -0.0207 0.00168
Customs
and trade
regulations
(d30b) 0.00109 0.01152 0.09488 0.92443 -0.0215 0.02369 -0.0215 0.02369
Tax rates
(j30a) -0.0059 0.0138 -0.43 0.6673 -0.033 0.02114 -0.033 0.02114

Business
Licensing
Permit
(j30c) 0.03459 0.01459 2.37133 0.01791 0.00597 0.06322 0.00597 0.06322
Political
instability
(j30e) 0.00197 0.01272 0.15468 0.87711 -0.023 0.02692 -0.023 0.02692
Corruption
(j30f) 0.01444 0.01265 1.14222 0.25363 -0.0104 0.03926 -0.0104 0.03926
Further with the help of the above regression analysis of Kenya it was outlined that the
expansion of the business will also be successful in Kenya as well. on the comparison of the
regression analysis of South Africa and Kenya it is clear that South Africa is better for the
expansion of the business (Heimann and Isaacs, 2018). this is pertaining to the fact that all the
factors are providing no obstacle within the expansion. Whereas in case of Kenya some of the
factors deem to be obstacle and this will be affecting the expansion of the business.
d. Highlighting the findings
The findings in the comparative analyses of South Africa and Kenya establishment it is
highlighted that the most suitable option for the company to establish its branch is South Africa.
The reason for choosing South Africa as the better option out of the two relies in the data
analysed above. The analysis reveals that the mean computed for each of the taken factor is
lower than 2, representing that the average obstacle is of minor impact nature. The standard
errors calculated are all less than 0.1, representing that the degree of obstacles is almost
negligible. Further the calculated median and mode reveals that the obstacles are minor showing
low impact of the factors over the business operations. The major aspects that are taken into the
consideration includes aaccess to finance, customs and trade regulations, tax rates, business
licensing permit, political instability and corruption. For accomplishing the highlighted objective
of the business in the South Africa as it is tended to give the good results as compared to the
other selected country. The main reason behind this indicates that it is highly important for the
organization to give emphasis on evaluating the crucial factors as it has impact at the time of
expansion.
It can be supported by looking at the views of Hamilton, and Webster (2018) there are
various types of the requirements of the business which are required to be attained in order to get
proper capability to achieve objective of establishing via expanding operation. For this purpose,

assessing these types of the factors becomes important in turn attaining reliable and relevant
becomes highly crucial for achieving goal of success. South Africa is largely focused for the
expansion as it is highly well-developed infrastructure which tend to offer the stability to firm
while conducting its operational actions. This provides assistance in understanding that firm to
get the proper level of ability to accomplish the organizational objectives of getting proper
finance, eliminating irrelevant corruption actions, etc. which tend to give significant reason for
functioning in business environment.
There are various aspects which are needed to be highlighted as tend to offer the higher
ability to function in the specified country as it is recognized that changing in the factors like tax
rates, corruption, etc. In addition to this, it is recognized that there are various types of the
aspects which are found to crucial and in South Africa that can provides assistance in meeting
the goal of expansion. There is acceptance of the fact that change in the mentioned factors tend
to impact the variables so giving focus on this is important in respect higher performance can be
derived. On the basis of this, it can be interpreted that achieving the reliable approach to deal
with these can help firm to get the precise manner in which relevant ability to have stability in
extensional practices can be achieved. This can assist the business to obtain appropriate
capability to enter effectively in the South Africa for gaining success.
e. Making recommendation to company relating to possible impact of these factor
From the conducted evaluation it is identified that having proper strategy is highly
crucial in respect to get the reliable approach to handle the possible impact from the mentioned
factors.
 The one of the significant approach that is highly required focusing on having the proper
level of information gathering about the all the external aspects that can lead to result in
impacting the business (Maphoto and Matlala, 2021). This can be done by having the
market research procedure into the consideration so that significant insights can be
attained to perform effectively via coordinating with changing requirements of business.
 This is suggested to the specified firm to pay attention on having reliable assessment of
the distinct finance sources which can permit to get the reliable understanding of the cost
of capital it needs to incur for meting objective. The main reason behind this is to get the
precise approach to have significant confidence to meet the objective via accomplishing

the requirements of business through eliminating any complications. This increases the
chances of succeeding in the market so paying attention on this approach is important.
 It is as well advised to the firm to concentrate on having consultancy about the tax rates,
finances, etc. dealing so that irrelevant level of legal complication which can be obtained
so eliminated for attaining goal. The main reason behind this is to get the precise
capability to meet get greater stability in market.
CONCLUSION
On the basis of the report the importance of data that WBES provides in analysing
whether the expansion decision should be taken or not in a particular region has been clear. The
report has analysed the data that is provided by the world bank enterprise has been done. The
analyses have been done in the report in order to gain a clear understanding of the information
that has been provided. Out of the information that have been provided the factors have been
selected for analysing the external environment that will affect the business expansion through
setting up of a branch in Kenya or South Africa. In this report it has been found that the
comparative analysis between the two reveals that the reveals that south Africa is best option.
The report has highlighted the findings and accordingly recommended the impact of the selected
factors.

REFERENCES
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Press.
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