| dc.description.abstract | In any economy, sectors of Agriculture, Commercial and Services,
Telecommunication and Technology, Automobile and Accessories, Banking,
Insurance, Investment, Manufacturing and Allied, Construction and Allied, Energy
and Petroleum, Growth and Enterprise Segment are the engine that drives economic
growth through efficient allocation of resources to productive units. Along the time,
the relationship between economic factors and firm efficiency has been studied in the
literature a lot. Approaches are numerous and very different. Since firm efficiency
can be influenced by factors that can be controlled by the firm, as well as by factors
that are not under the control of such firms the study sought to establish the
relationship between micro-economic variables and institutional efficiency of
companies listed in the NSE in Kenya. The study adopted a descriptive research
design. The population of interest for this study was all the 60 companies listed on
NSE in Kenya. Thus it will be a census survey. The study applied secondary data
which is extracted from the firms’ annual reports and financial statements for the fiveyear period commencing 2010 up to 2014. The data collected were therefore cleaned,
coded and systematically organized in a manner that facilitates analysis using the
Statistical Package for Social Sciences (SPSS). In order to test the relationship
between the variables the inferential tests including the regression analysis was used.
The study found that the four variables contribute to 70.9% of institutional efficiency
and that a unit increase in Capitalization leads to a 0.118 increase in institutional
efficiency. From the study findings and discussion, the study concludes that
microeconomic variables affect the level of institutional efficiency of companies
listed in the NSE. The conclusion is that microeconomic variables had a positive and
significant effect on institutional efficiency of companies listed in the NSE for the
period of this study. The study recommends that companies listed in NSE should
approve strategy and significant policies related to the management of liquidity risk
under both normal and stressed conditions and review and approve these policies
frequently as need arise. Also, it was recommended that a structure should be put in
place to effectively execute financial strategies and also develop methodologies and
policies to determine the level of earmarked liquid assets. | en_US |
