International Journal of Business and Social Science Vol. 4 No. 7; July 2013 64 Determinants of Initial Export Market Participation: (An Empirical Study on the Internal-Proactive and Internal-Reactive Factors among Micro and Small Enterprises in the Commercial Craft Sector in Kenya) Evans Mwiti PhD. Department of Business Administration Kenya Methodist University (Kemu) Gorretty A. Ofafa PhD. Department of Business Administration Kenyatta University Ambrose Jagongo PhD. Mkim Department of Accounting and Finance Kenyatta University. Abstract This study sought to investigate the determinants of initial export market participation among MSEs in the commercial craft sector in Kenya. This was motivated by the available evidence that MSEs play a critical role in the economy of most developing as well developed nations in terms employment creation occupation and subsequent wealth creation. The study specifically sought to determine the effect of internal-proactive factors on initial export market participation among MSEs in the commercial craft sector in Kenya. To investigate the effects of internal-reactive factors on initial export market participation among MSEs in the commercial craft sector in Kenya. The study adopted the stage theory and the factor proportions theories of internationalization and used a mixture of explanatory and descriptive research designs on a target population of 140 MSEs in the commercial craft sector in Kenya registered with EPC at the time of the study. Primary data was collected by use of a semi- structured questionnaire and the data was analyzed by use of measures of central tendencies, Factor analysis (for data reduction) and multiple regression analysis (to establish the variable relationships). The findings show that initial export market participation in Kenya MSEs is influenced significantly by internal proactive factors, (with some variables depicting negative significant skew, while others provide positive skew effect). The study concludes that to enhance export market participation and ensure a vibrant and competitiveness in the global marketplace, these internal proactive factors need to be continuously scrutinized with adequate attention. The study recommends that the governments and the relevant agencies need to collectively lobby and develop export sensitization programmes anchored on appropriate policies intended to boost MSE export market participation. Key words: MSE, Commercial craft, Export, Market participation, Internal-Proactive Factors. Background of the Study 1.1.1. Profile of Micro and Small Enterprise Sector Over the years the role played by the micro and small enterprises (MSE) sector has increasingly been recognized and appreciated not only in the developing but also the developed countries globally. This appreciation has largely been due to the contribution of the MSE sector to economic development particularly in employment creation. It is argued that in Latin America and the Caribbean, MSE’s make up more than 95% of the total number of business establishment and absorb more than 85% of total private sector employment in most countries (Sithore, 2007). The sector accounts for almost 60% of the Canada’s private sector employment and 43% of private sector gross domestic product (GDP). In countries like Botswana, Malawi, Swaziland and Zimbabwe, the estimated number of people engaged in MSE activities is nearly twice the level of employment in large enterprises and in the public sector (Mead and Liedholm, 1998).