Influence of Corporate Governance on Internationalization of Commercial Banks in Kenya
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Date
2017Author
Maghanga, Belinda, M
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The rate of internationalization among Kenyan Banks is not uniform. Key among the
causes identified for the perennial bank failures in Kenya is poor adherence to
corporate governance has not been adequately realized, leading to more bank failures
and other imminent ones in the offing. The collapse of banks such as Trust bank,
reliance bank, bank of commerce and credit international has not given a clear insight
on the need for corporate governance. The objective of this study was to examine the
influence of corporate governance on internationalization of Commercial Banks in
Kenya. The study was guide by the following theories; competitive advantage theory,
Agency theory and stewardship theory. This study utilized a descriptive research
design to gather and analyze data. The population for this study was all the licensed
43 commercial banks in Kenya. There was no sampling in this study since the
population size is small; therefore, this study adopted a census approach. Primary data
was collected through the use of questionnaires. Questionnaires were hand-delivered
to the respondents to fill. The researchers then employed the drop and pick method in
administering the questionnaire. Secondary data was sought from publications and
journals. The data collected through the use of questionnaires were coded and entered
into a computer system. The quantitative data was analyzed through the use of the
Statistical Package for Social Sciences (SPSS version 24). The study adopted both
descriptive and inferential statistics for data analysis purposes. Means and standard
deviations formed part of the descriptive statistics which analyzed the quantitative
data and also capture the characteristics of the variables under study while inferential
statistics involved linear regression. The study revealed that institutional ownership
influence foreign direct investment and that tradable shareholding influence decision
to venture abroad. The study found that board composition affects decision on
internationalization and that board diversity enriches with ideas on
internationalization. The study also indicated that bank CEO compensation became
more sensitive to internationalization as bank management became less regulate. The
study found that their risk taking incentives will depend on the degree to which their
best interest, that managers are likely to be risk-averse and that managerial is
positively associated with corporate performance. The study concluded that
managerial incentives having the greatest effect on internationalization of commercial
banks in Kenya followed by CEO compensation then managerial incentives and
ownership had the least effect on internationalization of commercial banks in Kenya.
The study recommends that since ownership structure affect internationalization of
commercial banks there is a need to balance between local and foreign investors and
that the management should look at the competence of the board members during
recruitment.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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