The effects of corporate governance practices on firm value: an empirical assessment of listed firms in Kenya
The main aim of this study is to investigate empirically the effects of corporate governance practices on the value of firm in the Kenya perspective using a Tobin's Q approach. Like many of the developing /emerging markets, the Nairobi Stock Exchange has initiated the application of international standards of corporate governance as a part of its merge with the global economy. This study utilizes a sample of 20 firms using accounting and market data available for 2009.The sample firms are all listed in the Nairobi Stock Exchange in the main investment segment market. The Study used both primary and secondary data. Primary data was collected through a structured questionnaire while secondary data were obtained from the Nairobi Stock Exchange handbooks for 2006. From the study the adjusted R2 is the coefficient of determination and tells us how the Tobin's Q in companies listed at the Nairobi stock exchange varied with Corporate Governance Index, Sales/Revenue, Age of the firm in the market and the financial . leverage ,the value of adjusted R2 is 0.511. This implies that, there is a variation of 51.1 % on Tobin's Q with Corporate Governance Index, SaleslRevenue, Age of the firm in the market and the financial leverage at a confidence level of 95%. There is a positive relationship between the Firms Tobin's Q with respect to Corporate Governance index and Financial leverage while also a negative relationship do exists between SaleslRevenue, and the age of the firm in the Nairobi stock exchange.