School of Business and Economics

Effect of supplier relationship management on the relationship between electronic data interchange integration and supply chain performance in sugar manufacturing firms in western Kenya

2025-11-11T07:32:55Z

Effect of supplier relationship management on the relationship between electronic data interchange integration and supply chain performance in sugar manufacturing firms in western Kenya AGWANDA, Peter Raila Globally and in Kenya to be specific, there has been a challenge on cost of manufacturing. Manufacturing cost has been rising for; a status report from the Sugar Directorate indicates that wholesale price of sugar in February 2017 was at average Sh 5, 352 per 50 kg, compared with Sh 4, 432 in the same period last year. In Kenya, sugar cane production decreased from 6.7 million tons in 2013 to 6.5 million tons in 2014 as reported in Economic Survey of 2014. Moreover, despite reporting increased cane delivery in 2015, supply chain in sugar firms remained dismal indicating inefficient firm processes and overall poor performance due to high cost of production. Its argued that supply chain(SC)s may use Electronic data interchange integration(EDII) to mitigate on cost and improve firm performance.SRM is management of all interactions with suppliers, while SCP performance means responsiveness, timeliness and reliability However; studies have not addressed this adequately. The purpose of this study was to determine the effect of supplier relationship management on the relationship between electronic data interchange integration and supply chain performance among sugar firms in western Kenya, the study established effect of electronic data interchange integration on supply chain performance; effect of supplier relationship management on supply chain performance; and effect of supplier relationship management on the relationship between electronic data interchange integration and supply chain performance. This study was anchored on resource based, transaction cost analysis, and social exchange theories. Correlation research design was used. Target population was 300 supply chain employees from 10 sugar manufacturing firms in western Kenya. A sample of 169 was drawn using cluster, purposive and simple random sampling. 10% of the sample was used to pre-test the questionnaire. Questionnaire and interview guides were used to collect primary data. Secondary data was obtained from Company’s’ records. Validity and reliability results were ≥ 0.7.9. EDI explained 55.1% of the variation in performance (R2=0.551), e-sourcing (β = 0.170, p<0.05); e-invoicing (β = 0.255, p<0.05), e-ordering (β = 0.208, p<0.05), and e-payment (β = 0.264, p<0.05) were positive and significant predictors of performance. SRM explained 40.2% of the variance in performance (R2=0.402). SRM moderates the relationship between EDI and performance (R2 change = 0.0354, p=0.0012). The study concluded that EDI, SRM have significant effects on SCP and that SRM has moderating effect on the relationship between EDI and SCP. The study recommends that adopted EDII in SCP should be implemented consistently for improved performance and because SRM has a significant relationship between EDII and SCP it should been enhanced for increased performance. Findings may provide useful information for policy formulation for faster decision making in enhancing increased customer service level in the sugar firms and availability of research literature for further research PhD Thesis

Organizational conditions for integrated financial management information systems’ implementation in five selected county governments in Kenya

2025-11-07T08:56:42Z

Organizational conditions for integrated financial management information systems’ implementation in five selected county governments in Kenya MUSUMBA, Charles Wakhaya Integrated Financial Management Information System (IFMIS) is a technology implementation in the budgeting, procurement, payroll and payment functions. It has been adopted in more than 50 countries around the world. Implementation of IFMIS in sub-regions such as counties often encounter challenges related to enforcement of internal controls, lack of management support, low staff commitment and centralized organizational structures. The counties of Nairobi, Turkana, Mombasa, Makueni and Baringo exhibited more of these challenges. As the controller of budget reports indicted, all the five counties recorded a 15% deviation in budget implementation, had high rates of manual payrolls, and a high number of errors in procurement and payments. Studies examining organizational conditions and IFMIS implementation in the five counties were missing. The focus on national controls and structures and use of quantitative techniques based on single case studies further limited the in-depth understanding of the conditions in the counties. This study sought to examine internal controls conditions, management support conditions, employee commitment conditions and organizational structure conditions and their role in IFMIS implementation in the five selected county governments in Kenya. The study was undertaken in the counties of Baringo, Makueni, Nairobi, Mombasa, and Turkana. Constructivism was adopted as the research philosophy. The study used qualitative approach to obtain in-depth views and experiences from multiple data sources. Multiple case study design was adopted to allow for triangulation. Data collection used interviews and observations based on interview guide and observation codebook. The target population was 20 directors, four from each county. Purposive sampling was undertaken to obtain directors of procurement, payment, payroll and budget. A total of 17 directors were successfully reached. The study used thematic analysis based on ATLAS.ti software. Data presentation used diagrams, photos, tables and discussion. Results confirmed the lack IFMIS controls in the five counties. Lack of policies and procedures was negatively connected to accountability and role clarity. Users encountered repeated IFMIS errors due to lack of IFMIS audits and reports. Management support to IFMIS implementation was observed. The provision of resources, motivation and training was connected to reduction of service interruptions. However, the counties lacked an IFMIS coordination and communication framework. This resulted to IFMIS service delays. Employee commitment was observed in norms such as punctuality. This was connected to IFMIS task completion. There existed negative attitudes and beliefs on IFMIS performance and job fitness. This resulted to user resistance of IFMIS adoption. The IFMIS use structures were highly centralized and departmental integration was lacking. This resulted to low departmental collaborations. The study also found high power distance which resulted into redundancies and use of manual system. The study recommends that senate reviews IFMIS related legislations to allow for county-level policies, procedures and audits. The study also recommends periodic IFMIS user reviews and IFMIS reengineering to align with emerging needs. Further, the study recommends that counties set up an IFMIS coordination and communication mechanism to enhance IFMIS implementation. The study also recommends that counties adopt a flat IFMIS operational structure to reduce bureaucracies and speed up project implementation. Future studies are recommended in non-county settings for comparative analysis. The main contribution of this study was the proposed Framework for Evaluation of Management Information Systems (FEMIS). FEMIS will have applications in academic research and organizational assessments of Management Information Systems. PhD Thesis

Effect of resource endowment, difference in resource endowment and return on gender agricultural Productivity gap among smallholder farmers in Busia county Kenya

2025-09-03T11:11:27Z

Effect of resource endowment, difference in resource endowment and return on gender agricultural Productivity gap among smallholder farmers in Busia county Kenya ANDELE, Steve The Food and Agriculture Organization highlights agriculture's crucial role in Africa's livelihoods and economic growth. However, productivity has declined recently; a Central Bank of Kenya survey reported a 6.6% drop in output per acre from 2020 to 2023, affecting food security. In Busia County, despite extensive farming areas for food crops, yields per acre have fallen, as noted in the CIDP. The gender productivity gap may be a key factor explaining this decline. This study investigated how resource endowments and returns contribute to this gap among Busia County's smallholder farmers, essential for boosting food security. The study aimed to assess how resource endowments, differences in endowments, and variations in returns to resource endowments impact the gender productivity gap in Busia County, Kenya. It used a framework based on Production theory and feminist theories, applying a pragmatist approach, quantitative methods, and correlational design. The study targeted 149,675 smallholder farmers, with a sample of 384, determined by Cochran’s formula and selected through multistage sampling. Data was collected via structured questionnaires, analysed descriptively and inferentially using t-tests, p-values, and confidence intervals, and processed through multiple regression and Oaxaca–Blinder decomposition techniques.The study revealed that fertilizer usage (β= -0.012, p=0.002), improved seed (β=0.016, p=0.006), plot size (β= -0.048, p=0.000), good soil quality (β= -0.029,p=0.003), university education (β= -0.057, p=0.000), college education (β= -0.025, P=0.027), commute time (β= -0.083, p=0.000), intercropping (β= 0.023, p=0.022), hired labour (β= 0.029,p=0.010), female family labour (β= 0.002, p=0.013), joint plot ownership (β= 0.05, p=0.0000), monthly income (β= -0.072, p=0.000), monthly expenditure (β= 0.033,p=0.013), and farmers’ age (β= -0.032, p=0.045) have significant effect on productivity gap. Additionally, Male endowment advantage (β= 0.0144, p=0.850) and female structural disadvantage (β= 0.573, P=0.00) have significant effect on gender agricultural productivity gap. This study concluded that resource endowments have significant effect on gender agricultural productivity gap. The gap is significantly explained by female structural disadvantages. To reduce the gap, implementation of policies and programs to ensure equiTable access to agricultural resources, empowerment of female farmers through on-farm education, strengthening land tenure rights for women, address gender disparities in labour allocation, promote multi-cropping practices, and build capacity for gender-responsive agricultural practices among stakeholders. The study contributed to a more comprehensive understanding of the differences between male and female farmers, shedding light on structural inequalities within the agricultural sector. PhD Thesis

Moderating Effect of Integrated Financial Management Information System Use on the Relationship between Supply Chain Practices, Procurement Performance of Lake Region Economic Bloc Counties, Kenya

2024-12-04T12:57:39Z

Moderating Effect of Integrated Financial Management Information System Use on the Relationship between Supply Chain Practices, Procurement Performance of Lake Region Economic Bloc Counties, Kenya MULONGO, Sebastian Procurement performance of county governments in Kenya, particularly within the Lake Region Economic Bloc (LREB), continues to face challenges despite the implementation of the Integrated Financial Management Information System (IFMIS). Recent studies and audit reports have highlighted non-compliance with procurement regulations, particularly in cost performance, where counties have experienced cost overruns, excessive delays, and poor budgetary control. Auditor General’s reports on LREB counties indicate persistent inefficiencies in managing procurement costs, with many projects surpassing their initial budget allocations by over 30 percent. Moreover, quality control and timely delivery issues related have negatively impacted overall procurement performance, raising concerns about effectiveness of supply chain practices in these counties. While supply chain practices are known to influence procurement performance, their impact might be significantly moderated by use of IFMIS. The Lake Region Economic Bloc counties have made strides in adopting the IFMIS system, but there is limited understanding of how its use moderates relationship between supply chain practices and procurement performance. This study examined the moderating role of IFMIS use between supply chain practices and procurement performance focusing on cost performance, timely delivery, quality, and budgetary compliance in LREB. By analyzing how IFMIS enhances or limits supply chain effectiveness, study aimed to offer solutions to improve procurement performance through better compliance, cost control, and transparency in the public procurement system. Specific objectives were to: establish effect of supply chain practices on performance; determine effect of IFMIS use on procurement performance, establish moderating effect of IFMIS use on between supply chain practices-performance. Study was conceptualized based on resource-based view theory by linking supply chain practices, IFMIS use and performance and adopted positivist philosophy in correlational research design. Target population was 382 staff (chief, procurement, finance officers) with 196 staff selected using proportionate stratified random sampling. Primary data were collected through 181(92.3%) useful questionnaires. A pretest was done in Uasin Gishu county where 20 staff was selected indicated instrument reliability at Cronbach’s Alpha coefficient α=0.9563. Validity confirmed by expert reviews, correlations matrix (SCP; r= 0.769, p=0.00), (IFMIS; r=0.773, p=0.00) since R-values were above 0.7. Multiple regression was adopted for data analysis and findings revealed supply chain practices have a significant positive effect (R2=0.500, β = 0.708; t=12.35, p<0.05), IFMIS use have significant positive effect (R2 =0.489, β=0.649, t=10.665, p<0.05) implying unit implementation of supply chain practices, IFMIS use results into 0.708, 0.649 units increase on performance respectively. Moderated regressions analysis revealed interactive effect (R2=0.110, β=0.393, t=8.555, p<0.05), confirming unit use of IFMIS increased procurement performance by 11 percent. Findings ratify theoretical evidence that counties create value by adopting IFMIS. Study concluded effective IFMIS use can lead to significant improvements in LREB counties procurement outcomes. Study recommended LREB devolved governments to prioritize the integration of IFMIS with supply chain management practices to fully realize the potential benefits for procurement performance. Study indicates, IFMIS use and supply chain practices leads to improved results. In practice, it contributes to knowledge on supply chain management and procurement policy formulation on procurement. PhD Thesis

Mediating effect of cash flow on the relationship between portfolio management and financial performance of insurance firms listed in the Nairobi securities exchange, Kenya

2024-12-01T11:33:31Z

Mediating effect of cash flow on the relationship between portfolio management and financial performance of insurance firms listed in the Nairobi securities exchange, Kenya WANDABUSI, Celestine Globally, Financial Performance of listed insurance companies reflects steady growth, which has over time varied across economies. For developing economies like Africa, the performance has revealed weaker growth reflected by declining premium trends. Kenya’s performance of listed insurance companies has been fluctuating. Despite its significant contribution to the national GDP, financial performance of these insurance firms generally remains low and unstable, as evidenced by aggregate profit and loss movement from 2011 to 2020; with Ksh.14,990,949, Ksh.13,104,366, Ksh.20,235,884, Ksh.17,232,664, Ksh.13,635,098, Ksh.12,832,644, Ksh.13,642,971, Ksh.7,269,263, Ksh.15,119,923, Ksh.6,388,958 respectively. Such poor financial economic value-addition, threatens economic growth. Literature demonstrates credible but inconsistent relationships between portfolio management and financial performance. Previous studies have tested the association between portfolio management, cash flows and firm’s financial performance, for listed insurance firms in the NSE; focussing on either accounting-based or/and market-based performance measures, which fails to predict the value creation abilities of the firm. Despite knowledge on portfolio management and cash flow on financial performance, it remains desirable to determine Economic Value-Added outcome of cash flow and portfolio management for the listed insurance firms in Kenya. Whereas studies assume nonexistence of intermediaries, the interaction operates on cash flow platform. The purpose of this study was to evaluate the mediating effect of cash flow on the relationship between portfolio management and financial performance of insurance firms listed at NSE. Specifically, it sought to; determine the relationship between portfolio management and financial performance, cash flow and financial performance, portfolio management and cash flow and evaluate the mediating effect of cash flow on the relationship between portfolio management and financial performance of NSE listed insurance firms. Modern portfolio, pecking order and Agency theories guided the study, while Correlational research design was used. Target population comprised six listed insurance companies reviewed for 10 years. Panel multiple correlation was used to analyse data. Results revealed; positive and significant effect of portfolio size on financial performance at (β = 0.5254, p = 0.0000) implying that a unit increase in portfolio size leads to 52.54% increase in financial performance, negative but significant effect of Portfolio asset allocation at (β = -0.4138, p = 0.0016) implying that a unit increase in portfolio asset allocation results in 41.38%decrease in financial performance, and portfolio risk at (β = - 0.1317, p = 0.0632)implying that a unit increase in portfolio risk results in a 13.17% insignificant decrease in financial performance. Cash flow has positive significant effect at (β = 0.3314; p = 0.0021) implying that a unit increase in cash flow results in 33.14% increase in financial performance and partially mediating the relationship between both portfolio size (indirect effect = 0.1622) and portfolio asset allocation (indirect effect = -0.08452) and financial performance. The study concludes that portfolio size and portfolio asset allocation are significant predictors of financial performance; while cash flow mediates the relationship between portfolio size, portfolio asset allocation, and financial performance. It is recommended that the NSE listed Insurance firms restructure portfolio management elements which will partially but significantly influence cash flow and in turn influence the firm’s financial performance; to assist policy makers and structuring of portfolio management. PhD Thesis

Social entreprenuership strategies, social innovation and resilience of one-acre fundhousehold livelihoods in Kakamega County, Kenya.

2024-12-01T11:26:07Z

Social entreprenuership strategies, social innovation and resilience of one-acre fundhousehold livelihoods in Kakamega County, Kenya. LIHANDA, Boniface Bakari One Acre fund programme a social entrepreneurship was introduced in Western Kenya to help improve maize production on one acre pieces of land. Reports indicate increase of 20% to 30% in maize production of 3000 to 4000 bags among One Acre fund households in the year 2017 to 2022 in Western Kenya. One Acre Fund households in Kakamega County remain in muddle and still suffer deficiency in meeting family obligations despite engaging all the social entrepreneurship strategies. Literature identifies five social entrepreneurship strategies that are seldom studied together in relation to resilience of household livelihoods with unknown impacts. Theoretically, literature indicates that social innovation moderates the relationship between social entrepreneurship strategies and resilience of One Acre Fund household livelihoods, extant literature does not present its empirical testing to ascertain its magnitude, direction and interaction effect. The purpose of this study was to examine the role of social entrepreneurship strategies and social innovation on resilience of One Acre Fund household livelihoods in Kakamega County Kenya. Specific objectives were: establish effect of social entrepreneurship strategies on resilience of One Acre Fund household livelihoods; determine effect of social innovation on resilience of One Acre Fund household livelihoods and analyse moderating influence of social innovation on the relationship between social entrepreneurship strategies and social resilience of One Acre Fund household livelihoods. The study employed the theory of social entrepreneurship, innovation diffusion and resilience theories. The study followed post-positivism research philosophy and used a correlational research design. Target population was 1390 households under One Acre Fund. Based on Leeuw sampling formula, 311 households were sampled using proportionate stratified random sampling technique. Pilot study was conducted on 31(10%) of sample size randomly sampled to test reliability. Validity was tested through content validity index and construct validity. Primary data was collected using questionnaires and secondary data was collected from magazines, books, diaries and pamphlets of One-Acre Fund. Found that social entrepreneurship strategies and social innovation had positive significant effect on resilience of One Acre Fund households (R²=50.9%, p<0.000 and R²=63.9% p<0.000 respectively). The interaction term results between Social entrepreneurship strategies and social innovation was R²=64.5% (∆R²=0.6%, p<0.01) implying that social innovation moderates the relationship between Social entrepreneurship strategies and resilience of One Acre Fund household livelihoods. The study concluded that, if more emphasis is put in social entrepreneurship strategies and social innovation, more resilience of One Acre Fund household livelihoods would be realised. The study recommends that farmers should adopt One Acre Fund model as coping mechanism to food insecurity build resilience in any disastrous situation. The study may provide useful knowledge and growth in literature of social entrepreneurship that can benefit government, academicians and researchers. PhD Thesis

Performance management in the relationship between transactional rewards and employee performance at teachers’ service commission, Kenya

2024-12-01T11:04:31Z

Performance management in the relationship between transactional rewards and employee performance at teachers’ service commission, Kenya ONYANGO, Abuor Amon Teachers Service Commission, Kenya (TSC) has struggled to offer quality service to teachers in Kenya. In particular, it adopted performance management besides transactional rewards for its secretariat staff in 2005/2006 fiscal year to ensure quality, quantity, and efficiency in service provision. Performance management and transactional rewards are critical strategies in enhancing efficiency in employee performance. However, in the last 16 years, quality service has consistently declined at the TSC. Approximately 5000 teachers visit its head office monthly, to solve their work-related problems. Similarly, customer satisfaction level decreased from 73.5% in 2016 to 59.8% in 2018. The literature review reveal that the findings of transactional rewards and performance management on employee performance respectively needs evaluation, and involves contradictions to attract better policy and practice. Studies also suggests that transactional rewards and performance management are responsible for employee performance but have not revealed the effect of performance management on the relationship between transactional rewards and employee performance. The purpose of this study was to determine the relationship between transactional rewards, performance management, and employee performance at TSC, Kenya. The objectives were to: Establish the effect of transactional rewards on employee performance at TSC, Kenya; determine the effect of performance management on employee performance at TSC, Kenya; and establish the moderating effect of performance management on the relationship between transactional rewards and employee performance at TSC, Kenya. This correlational research study was anchored on Goal setting theory. Primary data were collected from the 1200 TSC secretariat staff stationed in counties in Kenya using structured questionnaires. Krejcie and Morgan Table, and Cluster sampling technique were respectively used to select 291 TSC secretariat staff, and randomly sample the counties. Pilot results (N=21) and expert reviewers respectively, established reliability between α=.720 and .933 for variables, and high validity that provides unbiased data allowing 8-10% random error. Multiple regression results revealed that transactional rewards (B=0.325, p=0.000, R2=21%) and performance management (B=0.457, p=0.000, R2=42%) respectively predicted employee performance while the interaction (ΔR2=0.8%, p=0.042) explained the variation in employee performance. Transactional rewards and performance management thus significantly and positively affect employee performance, while performance management significantly moderates the transactional rewards-employee performance relations. The findings reveal that the existence of transactional rewards and performance management helps to improve performance at the TSC. Organizations should enhance the implementation and improvement of performance management, and integrate transactional rewards into their performance management framework for employee performance. Future research on the nature of this interaction effect should be conducted in private organizations. PhD Thesis

Effect of idiosyncratic risks and earnings quality on volatility of stock returns amongst firms quoted at the Nairobi securites exchange

2024-12-01T10:55:38Z

Effect of idiosyncratic risks and earnings quality on volatility of stock returns amongst firms quoted at the Nairobi securites exchange NYARIKINI, Caleb Orenge Globally, extreme levels of stock return volatility at the capital markets result to inefficiency in capital utilization and reduction in liquidity by firms. Locally, stock returns volatility at the NSE has led to a continuous decline in activity in the market for the past 8 years, as evidenced by continuous decline in the NSE 20 share index from 5,406 points in 2014 to1,672 points in April,2022. The presence of volatility of stock returns at the NSE can be attributed to idiosyncratic risks since the systematic risk is priced in the NSE stocks. Empirical evidence shows that, for investors who do not hold fully diversified portfolios, risks associated with managerial strength, intangible assets, environmental disclosure, firm size, liquidity, dividend policy and cash flow to price all have a significant effect on idiosyncratic volatility of stock returns. However, there is no empirical evidence directly linking idiosyncratic risks posed by capital expenditure, financial gearing and profitability to volatility of stock returns. Hence, this study sought to examine the effect of idiosyncratic risks and earnings quality on firm specific stock returns volatility. Specifically, the study sought to establish the effect of capital expenditure on stock returns volatility, the effect of financial gearing on stock returns volatility, the effect of profitability on stock returns volatility, the effect of earnings quality on stock returns volatility and the moderating effect of earnings quality on the relationship between the idiosyncratic risks and stock returns volatility at the NSE. Efficient Market Hypothesis, Modern Portfolio theory and Fama &French three factor model informed this study. Quantitative approach with correlational research design was employed using secondary data. Using purposive sampling technique, 24 listed firms were sampled yielding 240 firm-year observations from 2010 to 2019. Fixed effects panel data regression model was employed in the analysis of data. The results showed a positive and significant effect of both capital expenditure (CAPIT: β = 0.024737, p = 0.0000); and financial gearing (DCR: β = 0.386707, p=0.0000; AER: β = 0.025187, P = 0.0037) on volatility of stock returns at the NSE. This implies that 1% increase in CAPIT, DCR and AER leads to 2.4737%, 38.6707% and 2.5187% increase in volatility of stock returns respectively. On the other hand, the result showed negative and significant effect of both profitability (EPS: β = -0.006834, p=0.0452; P_E: β = -0.014044, p=0.0001; ROE: β = -0.513469, p=0.0028) and earnings quality (AQ: β = -0.012054, p=0.0003) on volatility of stock at the NSE. This implies that 1% increase in EPS, PE, ROE and AQ leads to a decline in volatility by 0.6834%, 1.4044%, 51.3469% and 1.2054% respectively. Earnings Quality had a positive and significant moderating effect on the overall model and the relationship, increasing R2 from 70.8197% to 82.0373%. The study concludes that capital expenditure and financial gearing are significant positive predictors of stock return volatility; while profitability and earnings quality are all significant negative predictors of volatility of stock returns at the NSE. Earnings quality positively moderates the relationship between capital expenditure, financial gearing and profitability on volatility of stock returns at the NSE. It is recommended that NSE listed firms should optimize their capital expenditure, use more of internal sources of finance and focus more on wealth maximization objective to reduce volatility of stock returns. These findings may be useful to policy makers and academia in designing models which capture idiosyncratic risks in stock pricing to mitigate against volatility of stock returns for firms at the NSE. PhD Thesis

Effect of financial innovations on financial performance of commercial Banks in Kenya

2024-12-01T10:18:35Z

Effect of financial innovations on financial performance of commercial Banks in Kenya MALIT, Evans Ochieng’ Commercial banking industry in all economies have been facing increased performance fluctuations due to high competition, interest rate changes, high credit risk, exchange rate fluctuations and liquidity problems. To overcome these challenges, commercial banking is evolving globally from conventional banking through financial innovations. A lot of innovations have been undertaken in banking sector that have led to proliferation of financial products, activities and organizational forms that have improved the efficiency of the financial system. Financial innovations such as branch networking, agency banking, mobile banking, electronic funds transfer are currently perceived to enable cost effective service delivery in the banking sector. In spite of uptake of these cutting edge innovations by the banking sector, return on assets and return on equity still remain low and unpredictable. Furthermore, loans uptake in terms of volume and quality remain low in relation to banked and general population. Despite its importance and the presence of extensive literature on financial innovations, a number of past studies have largely focused on process innovation as opposed to product and financial services innovation. Secondly, most past studies on Kenya have covered relatively shorter study periods which may not reliably capture the financial trends, more so given the short shelf life of financial studies caused by rapid changes in the financial sector. This study therefore examined the effect of financial innovation on the financial performance of commercial banks in Kenya between the year 2007 and 2017. The choice of research area was the need for justification of finnovs for better banking and financial sector performance due to its vital role in economic development. The specific objectives of the study were to; determine the effect of financial innovation on banks’ return on assets; to establish the effect of financial innovation on loan portfolio and to examine the effect of financial innovation on banks’ return on equity. This study was modeled on Constraint–induced and Schumpeter’s financial innovation theories and applied correlation research design. The target population was 42 Central Bank of Kenya registered commercial banks. The 12 Nairobi Securities Exchange listed commercial banks were purposively sampled. Secondary data for the study period was obtained from the Central Bank for Stata 15 panel data diagnostics and regression analytics. Results indicated that financial innovations had mixed effects on commercial banks. For return on assets; finnovs accounted for 51.34% of all variations as denoted by overall = 0.5134. Mobile banking, branch networking and total assets had positive effects on financial performance with coefficients of 0.052, 0.373 and 0.130 respectively with corresponding p-values of 0.050, 0.000 and 0.014. ROE and LA as regressors had negative impact on ROA. Finnovs accounted for 59.28% variations in loan portfolio as denoted by overall = 0.5928. Branch networking and total assets had positive effects with coefficients of 0.382 (p-value = 0.000) and 0.015 (p-value = 0.017) respectively. Both enhanced bank productivity from loans. However, ROA and ROE had -0.278 (p-value = 0.020) and -0.291 (p-value = 0.001) coefficients respectively. Both were significant but negative on loans, meaning they led to financial losses. For return on equity, finnovs accounted for 20.77% of all variations as depicted by overall = 0.2077. Mobile banking services, branch networking and total assets had positive effect denoted by coefficients 0.046 (p-value = 0.016), 0.307 (p-value = 0.000) and 0.130 (p-value = 0.050) respectively. The study concluded that use of some financial innovations improved financial performance; some innovations were however loss prone while a few had insignificant effect. In this view, the study recommends that banks and stakeholders should research, innovate and employ effective financial innovations to improve performance. This study may be useful to private and public sector financial policy makers as well as a source of information to academicians and investors. Further research should focus on; role of finnovs on performance of non-banking financial sub-sector as well as a study on challenges facing market available finnovs in Kenya. PhD Thesis

Influence of corporate governance practices, ownership concentration and firm size on financial performance of firms listed at Nairobi securities exchange, Kenya

2024-08-15T13:19:50Z

Influence of corporate governance practices, ownership concentration and firm size on financial performance of firms listed at Nairobi securities exchange, Kenya KIRUGA, Abraham Mutitu Financial status of firms listed on Nairobi Securities Exchange from 2016 -2020 showed a decrease in revenue of Ksh -89.671 billion, a decrease in market capitalization of Ksh-294.91 billion and a downward trend in the NSE 20 share index indicated by -Ksh 1317.82 billion. These unfavorable trends can be attributed to global cases of fraudulent financial reporting and the recent failures of several Kenyan companies. Notably, approximately 17% of these firms have been delisted or suspended, raising concerns about their management and significantly eroding investor trust. Despite Kenya's efforts to foster a favorable business environment and advancements made by many listed firms on the NSE, the results have been mixed, with corporate governance practices, ownership structures, and firm sizes exacerbating these issues. The interplay between company size, ownership concentration, corporate governance practices, and financial performance remains unclear. There is no clear consensus on the impact of these practices on ROA or ROE respectively. However, ROE and ROA are two key and best standard most commonly measures used to determine how efficiently a company generates profits. Empirical evidence has linked financial performance to corporate governance practices and ownership concentration, making it crucial to comprehend their implications. Whereas these results reveal average performance of individual firms, these firms operate under different internal environments, including their sizes which determine their economies. Research demonstrates company size is a significant moderator, because it is a major factor in defining profitability of a firm because of concept of economies of scale. Main objective of this research was to investigate influence of corporate governance practices, ownership concentration, and Firm size on financial performance of listed firms at NSE. Specifically, to evaluate influence of corporate governance practices, ownership concentration and firm size on financial performance of listed firms at NSE, to establish the moderating influence of firm size on the relationship between corporate governance practice as well as ownership concentration and financial performance of listed firm at NSE. Agency theory, stakeholders' theory, and economies of scale theory serve as research foundation. This research is anchored on the positivist philosophical model. The study employed a correlation research design and focused on 66 listed firms at the Nairobi Securities Exchange between 2016 and 2020. To ensure data consistency, firms that were delisted, suspended, or listed after 2016 were excluded, resulting in a sample of 55 firms, generating 275 data points. The study adopted quota sampling approach, since it satisfied those criteria of my study, and collected secondary data from audited financial statements reports. The results underscore the significance of corporate governance practices on return on assets (ROA) {F (34.150, p=0.006)} and return on equity (ROE) {F=9.67, p=0.009, emphasizing their pivotal role in a company's success. Additionally, ownership concentration significantly affects ROA F=35.88, p=0.000)}, highlighting its impact on organizational profitability. Firm size plays a vital role in determining ROA, (β=0.842, p=0.364) while it exhibits no significant effect on ROE (β=0.018, p=0.725). Importantly, firm size moderates the relationship between corporate governance practices, ownership concentration, and financial performance, underlining the interconnectedness of these factors. The study recommends that public companies establish robust corporate governance practices to achieve defined objectives and enhance financial outcomes. Moreover, maintaining a strong ownership structure with a substantial number of shares, along with considering firm size, is vital for driving company performance. These findings are of particular relevance to investors, policymakers, regulatory authorities, and fellow researchers, offering insights that can inform their decisions and contribute to the advancement of financial practices and policies.