Trade Facilitation and Innovativeness: Cottage Industry Development in Uganda

Abstract

This study investigates the combined effects of trade facilitation and innovativeness on the development of cottage industries in Kampala City, Uganda. The research was motivated by the increasing relevance of cottage industries as engines of inclusive growth and the need to enhance their competitiveness and sustainability in developing economies. Anchored in the Resource-Based View (RBV) and New Institutional Economics (NIE) theories, the study conceptualizes trade facilitation and innovation as strategic and institutional enablers of firm performance. A cross-sectional mixed-methods design was employed, utilizing both quantitative and qualitative data collected from 250 cottage industry operators using stratified random and purposive sampling techniques. Results from Pearson correlation and regression analyses revealed significant and positive relationships between both trade facilitation (? = .41, p < .01) and innovativeness (? = .361, p < .01) with cottage industry development, jointly explaining 51.4% of the variation. Thematic analysis of qualitative data reinforced these findings, with participants highlighting how improved logistics, streamlined trade processes, and innovation in product development drive expansion, market access, and competitiveness. The study underscores the need for integrated policies that promote innovation ecosystems and remove institutional barriers to trade. Recommendations include investment in infrastructure, digital trade platforms, training in innovation practices, and stronger linkages between industry and support institutions to realize sustainable cottage industry growth