Reverse Logistics and Firm Performance in Kenya’s Manufacturing Sector

Abstract

Reverse logistics has emerged as a strategic component of Green Supply Chain Management (GSCM), enabling firms to recover value from returned products, minimise waste, and enhance sustainability. This study examined the effect of reverse logistics practices on the performance of manufacturing firms in Kenya. Anchored on the Resource-Based View, Stakeholder Theory, and Institutional Theory, the study employed an explanatory research design targeting 1,163 manufacturing firms, with a sample of 298. Data were collected using structured questionnaires and analysed through multiple regression and chi-square tests. Findings revealed that reverse logistics had a significant association with firm performance (χ² = 484.167, p = 0.025), though its regression effect was statistically insignificant (β = 0.154, p = 0.236). The study concludes that while reverse logistics contributes to environmental compliance and customer satisfaction, its impact on financial performance remains limited due to infrastructural and policy constraints. The paper recommends investment in reverse logistics infrastructure, integration of circular economy principles, and policy incentives to enhance sustainability and competitiveness.