Asian Journal of Economics, Finance and Management

Most commercial State-Owned Enterprises (SOEs) in Nairobi, Kenya, have been underperforming, often relying on financial bailouts. This study investigated the impact of strategic alliances on their performance, focusing on resource sharing, risk sharing, regulatory compliance, and cost-efficiency-based alliances. Grounded in resource reliance, resource-based view, and public interest theories, the study employed a descriptive survey design, targeting all 37 commercial SOEs in Nairobi. Using purposive sampling, one senior manager from each SOE participated, and structured questionnaires were used for data collection. Data analysis involved descriptive statistics (mean, standard deviation, and coefficient of variation) and inferential statistics (Pearson correlation and multivariate regression). Results indicated that strategic alliances significantly influenced SOE performance, explaining 88.7% of performance variation. Resource-sharing alliances had a positive and significant effect, while risk-sharing alliances also strongly predicted performance (β2= .369, p=.005). Regulatory compliance-based alliances had the highest effect, and cost-efficiency-based alliances significantly enhanced performance (β4= .454, p=.000). The F-calculated value (63.043) exceeded the critical value (2.69), confirming the strong relationship between strategic alliances and SOE performance. The study concluded that forming strategic alliances is crucial for improving the financial and operational sustainability of commercial SOEs in Kenya.