dc.contributor.author | Chomba, Ken | |
dc.date.accessioned | 2013-11-13T09:53:34Z | |
dc.date.available | 2013-11-13T09:53:34Z | |
dc.date.issued | 2013-10 | |
dc.identifier.citation | Chomba,Ken;October,2013.The Effect Of Capital Structure On The Corporate Governance Of Companies Listed At The Nairobi Securities Exchange. | en |
dc.identifier.uri | http://erepository.uonbi.ac.ke:8080/xmlui/handle/123456789/58872 | |
dc.description.abstract | Corporate governance is concerned with the way that power is exercised over corporate
entities. Capital structure refers to the combination of debt and equity capital that a firm
uses to finance its long-term operations. The capital structure choice of the firms
becomes important factor in corporate governance practices. The relation between
capital structure and corporate governance becomes extremely important when
considering its fundamental role in value generation and distribution. The objective of
this study was to investigate the effect of capital structure on corporate governance of
firms listed at the Nairobi security exchange.
The study employed descriptive survey design with the population of the study being 51
companies listed on the NSE.The sample size for this study was made up of 35 listed
companies excluding the financial, investment and insurance companies due to their
peculiar nature of capital structure.The study used secondary data from annual reports of
the quoted companies over a period of five years. The data was analyzed through the use
of Statistical Package for Social Sciences (SPSS).
Results from the study indicate that most firms in the NSE use more debt or long term
liability as a source of financing than equity capital from shareholders. ANOVA
statistics presented showed that the overall model was statistically significant as this was
supported by an F statistic of 3.4 and a probability (p) value of 0.021. Regression of
coefficients results showed that there was a positive relationship between corporate
governance and capital structure, size of the firm, liquidity and firm opportunity whose
beta coefficients are 0.072, 0.000, 0.215 and 0.933 respectively. Statistically significant
variables in the study were capital structure, size of the firm and opportunity of the firm
as they had p values of 0.000, 0.008 and 0.034 which is lower than the probability
conventional of 0.05. These findings show thatcompanies in the NSE have good return
on assets and have the ability to meet their short term obligations when they fall due.
Further, most firms in the NSE use more debt or long term liability as a source of
financing than equity capital from shareholders. This study adds on to theory because it
tests the reverse relationship between capital structure and corporate governance. | en |
dc.language.iso | en | en |
dc.publisher | University of Nairobi | en |
dc.title | The effect of capital structure on the corporate governance of companies listed at the Nairobi Securities Exchange | en |
dc.type | Thesis | en |
local.publisher | College of Humanities and Social Sciences | en |