Determinants of Capital Structure in the Kenyan Mobile Telecommunication Companies
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Date
2016Author
Ihiga, Magdaline W
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Theoretically, it is hypothesis in the pecking order that that management usually has more
information regarding the company than the outside investors. These mixed results from
various theories give need for research to investigate on the determinants of leverage of the
company. In the Kenyan context, capital structure on profitability, capital structure decision
making and capital structure on performance have many researchers review on these aspects.
There is mixed empirical evidence on the determinant of capital structure among
telecommunication in developed countries , hence the research gap which this study sought
to fill by conducting a study in developing country like Kenya. The objective of the study
was to establish the determinants of capital structure in the Kenyan mobile
telecommunication industry. The study adopted descriptive research design study in which
data was gathered just once over the period 8 years from 2009 to 2015 for 4
telecommunication companies in Kenya. The study was facilitated by use of secondary data.
Multiple regression analysis was applied to the data to establish the determinants of capital
structure in the Kenyan mobile telecommunication industry. The study found that that 80.4%
changes on capital structure of telecommunication firms could be accounted for by changes
in firm size, asset tangibility, firm growth, profitability and earning volatility. The study also
revealed that there was strong relation ship between capiatl structure and firm size, asset
tangibility, firm growth, profitability and earning volatility. The study further revealed that
firm size, asset tangibility, firm growth, profitability and earning volatility significantly
affects capital structure of telecommunication firms in Kenya. From the finding the study
found that firm size had positive significant effect capital structure) of telecommunication
firms. The study also revealed that asset tangibility had positive significant effect on capital
structure of telecommunication firms. The study established that firm growth had positive
significant effect on capital structure of telecommunication firms. The study found out that
profitability had negative significant effect on capital structure of telecommunication firms.
The study revealed that earning volatility had negative significant effect on capital structure
of telecommunication firms. The study found that firm size, asset tangibility and firm growth
positively influence the capital structure of telecommunication firms, whereas profitability
and earning volatility were found to negatively affect the capital structure of
telecommunication firms.
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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