| dc.description.abstract | This study was carried out to investigate the relationship between Financial Innovation and Capital structure of the firms the Nairobi Securities Exchange. Though capital structures as well as financial innovation are widely studied, few studies have been done trying to capital structure and innovation which is very important in the current world. The study focused was on 44 firms listed in the NSE that were trading over the study period. The data used in this study was secondary data. The secondary data was collected from the companies audited financial statements, the central bureau of statistics as well as from Kenya Industrial Property Institute. The data collected was run through various models so as to clearly bring out the effects of financial innovation on Capital structure. The results obtained from the models were presented in tables, bar graphs and line graphs. The study period was year 2008 to 2012. Multiple Linear regression analysis model was used to analyze the data using SPSS program. The literature review identifiedwhat other researchers have done in the area of financial innovations and financial performance of intermediaries. The study was conceptualized to determine the relationship between the dependent and independent variables and the influence of the intervening variables on the relationship between the dependent and the independent variables. To measure the dependent variable, capital structure, leverage was used where the book value of debt was divided by the total book value of (debt + Equity). For independent variable, financial innovation, the number of registered Trademarks was used as the measure of financial innovation. Other determinants of capital structure were also tested as independent variables. These were profitability as given by return on Assets and Assets Tangibility as explained in the Research Methodology. The study concludes that there is a strong and significant relationship between capital structure and the independent variables in this study which include Assets Tangibility, Firms Profitability, Number of Registered Trademarks and that innovation has a great impact on the capital structure. In addition, the study concludes that capital structure has been on a downward trend over the period of the study | en_US |
