Performance Of Firms In Kenya Research Articles

Relationship between increased Taxation and Financial Performance of Kenyan Firms

Taxation plays a critical role in financing government activities, public services, and economic development. This study focuses on examining how taxation impacts the financial performance of firms in Kenya. The complex interplay between tax policies and financial outcomes is multifaceted, and understanding these dynamics is crucial for effective tax strategies and financial optimization. The theoretical frameworks of "Ability to Pay Theory," "Classical Taxation Theory," and "Political Power Theory" are explored to provide insight into the relationships between taxation and business performance. These theories help us understand how tax rates, incentives, and political influences can affect firms' profitability, investment, and overall financial performance. By reviewing existing literature and conducting empirical research, this study aims to shed light on the specific challenges and opportunities that taxation presents to businesses in Kenya. The study observed that the influence of taxation on the financial performance of Kenyan firms is significant and multifaceted. Understanding the effects of customs duty, PAYE, and VAT is crucial for informed decision-making and effective management of financial resources in the business environment. Further research should explore the specifics of these impacts and potential mitigating measures.

CORPORATE SPECIFIC ATTRIBUTES AND THE PERFORMANCE OF LISTED FIRMS IN SELECTED SUB-SAHARA AFRICA COUNTRIES

The paper investigated the effect of corporate specific attributes on financial performance by employing samples from listed non-financial firms in Sub-Sahara African countries of Kenya, Nigeria, and South Africa between the periods of 2012-2021. The study sourced data from annual reports of non-financial firms in Nigeria, Kenya, and South Africa. The model evidenced that, the series are evenly spread, are not faced with multi-collinearity issues, and that the robust fixed effect model is appropriate for the study since the p-value of the Hausman Test estimated at 0.000 is below 0.05 significant level. Evidently, the results obtain from the fixed effect regression shows that, firm size has an inconsiderable (insignificant) positive effect on firm performance both in Kenya and Nigeria. However, it has an insignificant negative effect on firm performance in the case of South Africa. Again, liquidity (current ratio) has an insignificant positive effect on firm performance. Furthermore, asset tangibility has a negative and insignificant effect on the performance of understudied firms in Kenya but reduce the performance of understudied firms in Nigeria. In the case of South Africa, asset tangibility improves the performance of South African firms minimally. However, only leverage was consisted in the three sampled firms in that leverage has a negative and significant effect on the performance of firms in Kenya, Nigeria and South Africa. Meanwhile, cash-flow from operations exerted direct yet considerable effect on understudied firms in Kenya but had adverse yet negligible effect on understudied firms in Nigeria. Hence, the paper submits that, managers of SSA firms should endeavor to reinvest profitability into the firm, which will increase the growth of the company and enhance financial performance.
 Keywords: Corporate Specific Attributes, Performance, Listed Firms, Sub-Sahara Africa Countries.

Effects of Cost of Capital on Firm Performance in Kenya

This paper discusses the importance of the cost of capital and its impact on the performance of firms in Kenya. The cost of capital is affected by various factors such as interest rates, inflation, market conditions, and government policies. Financial managers use discounting cash flow techniques to evaluate capital investments, which requires the estimation of the project's cash flows and the discount rate. The article also explores the concept of capital structure and its significance in determining the cost of capital. Managers need to manage the capital structure effectively to optimize shareholder wealth and minimize the company's cost of capital. The article highlights the importance of balancing the mix of financing sources between debt and equity. High costs of capital can limit a firm's access to financing, while low costs of capital can improve a firm's investment and growth opportunities. This article concludes that the cost of capital is an essential factor that affects the performance of firms in Kenya. It impacts investment decisions, financial structure, and competitiveness in the market. Researchers suggest that managers should balance the use of debt and equity financing in an optimum manner to maximize shareholder wealth. However, the research suggests that high costs of capital can discourage firms from investing in new projects, reducing growth and profitability. Firms need to evaluate their cost of capital and consider strategies to lower it, such as improving creditworthiness or exploring alternative financing options.

Strategy Implementation Practices and Performance of Insurance Companies in Kenya

Organizational performance has transformed into a hypothesis which relies on various facets within the company such as its top management and how strategies are implemented. It is however worth noting that what sets organizations apart depends upon their share in the market, corporate image, level of customer satisfaction and profit margins. Firms within developed and developing nations have encountered challenges in implementing their strategies. This has particularly been experienced by insurance companies in Kenya, through a decline in their performance. The study therefore aimed at investigating effects of strategies implementations methods on effectiveness of insurance firms in Kenya. The precise goals for the research were to: to determine the impact of resource allocation, staff training, organisation communication and organisation culture on performance of insurance firms in Kenya. Open systems theory and Transformative theory were used in the study together with Holistic strategy implementation theory. The survey was conducted using a descriptive research methodology. Forty one (41) insurance organizations in Kenya formed the target population with 123 respondents out of which a sample of 94 respondents was chosen at employing Israel’s formula. Structured questionnaires were the major data collection method for obtaining primary data. The findings revealed that resource allocation, staff training, organisation communication and organisation culture all had substantial impact on performance of Kenyan insurance companies. The survey indicates that strategies implementations methods have substantial impact on performance. This survey suggests that the finance managers of the insurance firms in Kenya must set aside sufficient funds to finance implementation of strategies. The human resource managers working in the insurance firms in Kenya should organize regular on-the-job and off-the-job training programs to enhance the skills of employees so that they can be able to implement formulated strategies. The communication managers and public relations officers working in the insurance firms in Kenya should work to improve on the existing communication channels to enhance the flow of information among employees as they implement strategies. Departmental heads working among insurance firms in Kenya should strengthening the corporate culture by communicating the organizations values to employees.

An Analysis of Transportation Costs and Performance of Public Sugar Manufacturing Firms in Kenya

The sugar industry in Kenya has been in existence since the early 1920s. A report by the Export Processing Zone Authority (2015) indicates that the sugar industry supports more than six million people in the country; representing more than 16% of the entire Kenyan population. The sector has had immense operations management challenges contributing to poor performance of public sugar manufacturing firms. These challenges include: high transportation costs of both raw materials and finished products. This has led to most public sugar manufacturing firms requiring bailout from the government contrary to their private counterparts. This study was anchored on three theories; Resource Based Theory, Systems Theory and Dynamic Capabilities Theory to establish effect of operations management on performance of public sugar manufacturing firms in Kenya. The specific objective was to establish how transportation costs affect performance of public sugar manufacturing firms in Kenya. The unit of analysis was six public sugar manufacturing factories in Kenya that were operational for the last 10 years that is from 1st January 2009 to 31st December 2018. The study used a mixed research design; specifically, cross-sectional and explanatory research designs. The target population of the study was stratified as 6 operations managers and 60 heads of departments of public sugar manufacturing firms in Kenya. The study used both primary and secondary data. Data was analyzed using both descriptive and inferential statistics. The findings obtained R value at 0.295 and R2 of 0.087 on variation of performance of public sugar companies caused by transportation costs. An analysis of variance (ANOVA) was computed and resulted to [F (1, 49) = 4.563, P<.05] it was evident that transportation costs influence performance of public sugar manufacturing firms in Kenya and thus it is a significant predictor.

Contractual Supply Chain Governance, Relational Supply Chain Governance and Performance Of Agro Processing Firms In Kenya

Contractual Supply Chain Governance, Relational Supply Chain Governance and Performance Of Agro Processing Firms In Kenya

IT Capability, Organisational Learning and Innovation Performance of Firms in Kenya

This paper explores the role that IT capability (IT-c) plays in firm innovation performance through the channel of organisational learning (OL) in Kenya. It frames OL in two dimensions: explorative and exploitative OL. The former entails seeking new knowledge, which mainly exists outside the firm’s competence. The latter is an activity or process that builds on existing competence and knowledge in the firm. Using mediation analysis of 481 firms drawn from the World Bank Enterprise Survey (2013) and Innovation Follow-up Survey 2014, it demonstrates that IT-c has a significant effect on innovation performance of firms (capability to simultaneously improve products, processes, organising and market development). It finds that the mediative role of OL in the relationship between IT-c and innovation performance is realised mainly through explorative learning, whilst enabling the firm exploit existing (in-house) knowledge base. The paper puts forward some managerial, policy and further research suggestions.

Marketing Strategies, Industry Competition and Export Performance of Fresh Produce Firms in Kenya

Despite the increasing number of firms pursuing the export market, little is known about the moderating role of industry competition in the marketing strategy and export performance link. The majority of the studies have focused solely on the direct relationships between two variables at a time and overlooked potential moderating factors that could influence export performance. To address this gap in the literature, this study solicited responses from 100 fresh produce export firms. Primary data was collected using a structured questionnaire. The overall objective of the study was to determine the influence of industry competition on the relationship between marketing strategies and the export performance of fresh produce firms in Kenya. The specific objectives were to establish the influence of product strategies on export performance of fresh produce firms; assess the effect of price strategies on export performance of fresh produce firms; examine the effect of promotion strategies on export performance of fresh produce firms; examine the influence of place strategies on export performance and to determine the moderating role of industry competition on the relationship between marketing strategies and export performance of fresh produce firms. The study outcome revealed that industry competition influenced export performance through marketing strategies. Findings from the study build on the industrial organization economic theory which postulates that the long-term profitability and attractiveness of an industry can be explained by the strength of all five forces together. Likewise, empirical findings recommend that managers should identify opportunities and threats within the industry and subsequently use this information to formulate marketing strategies.

E-Supplier Management Practices on Supply Chain Performance of Sugar Processing Firms in Kenya

The purpose of this study was to establish the influence of electronic supplier management practices on supply chain performance of sugar processing firms. The target population is 7,584 employees of sugar processing firms in Kenya and Yamane Taro’s formula was applied to come up with a sample size of 379 respondents. Data was gathered by a questionnaire, interviews and observation. Correlation was used to determine the relationship between E-supplier management practices and Supply chain performance while regression analysis tested the hypothesis. The study established that E-supplier management practices enhances supply chain performance. Two kinds of supply chain are proposed; Managerial and demand. Managerial supply chain where as a result of electronic supplier management practice, flow of goods and services from the suppliers are properly managed through information sharing between the buyer-seller thus improved deliveries. Demand supply chain where as a result of electronic supplier management practice, buyers and suppliers tend to develop a single shared forecast of demand and a plan of supply in the sense that buyers issue order for only needed materials from the suppliers and that suppliers fulfills the orders as requested by the buyers. To ensure that the proposed supply chain under e-supplier management,it is recommended that Sugar processing firms’ management should ensure working Websites, working internal and external mail and also provide their suppliers with access credentials to company electronic procurement portal to increase buyer and supplier access to information to enhance E-supplier management practices.

The Relationship Between Intellectual Capital, Research and Development and Organizational Performance of Tea Processing Firms in Kenya

The Relationship Between Intellectual Capital, Research and Development and Organizational Performance of Tea Processing Firms in Kenya

The Moderating Influence of Competitive Environment on the Relationship between Marketing Mix Strategies and Performance of Tour Firms in Kenya

This study examined the competitive environment’s moderating effect on the relationship between marketing mix strategies and tour firms’ performance in Kenya. The researcher adopted a descriptive research design and used a survey approach to collect pertinent data for analysis. The study population comprised all tour firms, both locally and foreign-registered, operating under the Kenya Association of Tour Operators (KATO) as of September 2019. Two hundred thirty-four tour firms were surveyed out of a population of 260 registered firms. Descriptive statistical and inferential analyses were conducted and regression analysis results were used to test the hypothesis. The study established a positive and significant moderating effect of Competitive Environment (CE) on the relationship between Marketing Mix Strategies (MMS) and the Organizational Performance (OP) of tour firms in Kenya. The study’s findings are significant to policymakers and stakeholders operating in the tourism industry.They accentuate the significance to tour firms in implementing the right kind of marketing mix strategies to maximize their organizational performance. The study recommends future studies in the same area be expanded to include other travel trade areas such as hoteliers and travel agencies. Such a study would increase the empirical knowledge in the subject matter while also extending the generalizability of the results.

Nexus between Cost Leadership Strategy and Performance: Fact or Fallacy in Milk Processing Firms in Kenya

Milk processing firms as a constituent of the food processing sector play a crucial function both economically and nutritionally. However, performance in the industry continues to be impended by high costs leading to low profitability margins, decline in output and collapse of some firms while others show stunted growth. It is hypothesized that this situation can be remedied by pursuing cost leadership strategy through economies of scale, economies of scope and operational efficiency. Extant literature however is scanty on how this strategy is employed by milk processing firms in Kenya with studies done failing to focus on how the firms manage costs as a driver for better performance. This has made it difficult to determine whether the hypothesized effect is a fact or fallacy. This study thus was an investigation of the effect of cost leadership strategy on performance of milk processing firms in Kenya. It was anchored on the balanced scorecard model complemented by the resource based view and capability based view theories. The study empirically examined the relationship using data from milk processing firms in Kenya obtained from a sample of 168 key respondents. The findings showed that cost leadership strategy had a positive and significant effect on performance of milk processing firms in Kenya. The study recommends that milk processors improve their performance by cutting costs through measures to increase their scale of operations, expand into related business areas and improve operational processes. The government and other the regulatory bodies should implement corresponding supportive policies and reforms.

Corporate Social Responsibility Disclosure and Financial Performance of Firms in Kenya: A Stakeholder Approach

Using panel data set from companies listed on the Nairobi Securities Exchange in Kenya, a developing country, this paper examines the potential influence of corporate social responsibility disclosure (CSRD) on corporate financial performance. Using data from annual reports, CSRD information was collected for the period 2007-2015 using quantitative content analysis while financial performance data was collected for the period 2008-2016, a one-year lag behind CSRD data. Control variables were firm size, industry type and leverage. There was found to be no statistically significant impact of CSRD on financial performance. Since neutrality of the relationship is empirically proven, the conclusion is that CSRD has little or no contribution to financial performance and the implication is that effective financial reporting for companies listed on the NSE does not include reporting on CSR activities. Theoretically the study proposes that unequal controlling strengths of different stakeholders be assumed under the stakeholder theory for application within different national contexts in order for managers to be able to make the necessary tradeoffs among competing stakeholders.

Environmental Disclosure and Financial Performance of Firms in Kenya: A Stakeholder Approach

Using panel data analysis this study examined the influence of environmental disclosure in annual reports on financial performance of companies listed on the Nairobi Securities Exchange in Kenya. Environmental disclosure information was collected using quantitative content analysis for the period 2007–2015 while financial performance data was collected for the period 2008–2016, a one-year lag behind the environmental disclosure data. Control variables were firm size, industry type and leverage. Environmental disclosure was found to be statistically significantly positively related to the firms’ return on assets but not statistically significant with return on equity and Tobin’s Q. The overall results suggest that disclosing environmental activities neither improves financial performance nor deteriorates it. Keywords: Environmental disclosure; Financial performance; Developing country; Kenya; Panel data DOI: 10.7176/RJFA/11-14-07 Publication date: July 31 st 2020

Effect of gender diversity on the financial performance of insurance firms in Kenya

The aim of this study was to examine the effect of gender diversity on the financial performance of insurance firms in Kenya. The study analyzed data from the 55 insurance firms licensed by the Insurance Regularity Authority (IRA) in Kenya. Gender diversity was operationalized by the number of female directors serving on the boards of insurance firms operating in Kenya. Primary data was collected from a sample of 412 board directors, Chief Executive Officers (CEOs), Chief Finance Officers (CFOs), Audit Committee members (AUDIND) and Internal Auditorsusing a questionnaire instrument while secondary data was retrieved from audited financial reports of the year 2017. Data were analyzed using descriptive and inferential statistics. Firm performance was measured by the two accounting-based measures Return On Assets (ROA) and Return On Equity (ROE). The findings from the regression analysis indicate that gender diversity significantly and positively affects the financial performance of insurance firms in Kenya.

Effect of Liquidity, Corporate Governance, and Competitiveness on Financial Performance: An Empirical Analysis of the Sugar Firms in Kenya

projected annual growth of 10 percent in GDP. Whereas literature reveals fluctuating financial performance in the sugar firms, previous findings have not targeted contributions on liquidity, corporate governance and competitiveness on the financial performance of sugar firms. The poor financial performance of Kenyan sugar firms has made them heavily indebted to the tune of more than US$ 1 billion cumulatively as at year ending 2014. The aim of this study was to determine the effect of liquidity, corporate governance, and competitiveness on the financial performance of sugar firms in Kenya. The specific objectives were to determine the effect of firm liquidity current liability coverage ratios, the percentage of the board of directors’ expenses and operating costs, production costs per tonne on the financial performance of the firms in Kenya. The study target population was five sugar firms on which census sampling was applied. Secondary data comprising, twelve years from 2005 to 2016. A cross-sectional retrospective research design was used for this study. Diagnostic tests were to identify the reliability and validity of the data. Panel correlation and multiple linear regression were used in the analysis. The estimation results indicated that there is a negative effect between corporate governance, competitiveness, firm age and management efficiency. Firm size had a positive effect, while; monetary policy had a negative effect on firm performance. Fixed effects panel regression results reveal that the effect between current liabilities coverage ratio and financial performance was negative at , and statistically insignificant at a 5% level of significance. Secondly, the study results showed that corporate governance, had a negative and significant effect on the financial performance with . The study results also established that competitiveness, as a proxy of the firm’s production costs per tonne, has a statistically significant negative effect on a firm’s financial performance with . The study recommends consideration and planning of funding liquidity and the need for the sugar firms to increase their operating cash flow, to positively influence their financial performance. Furthermore, sugar firms need to keep their production costs optimal as high costs negate their financial performance. Moreover, the sugar firms should cut on board expenses and operating costs to strengthen the sector and firm’s the financial position. The findings of the study may help to develop a policy framework on financial performance to guide the different players in the sugar firms to improve the financial performance and contribute to the existing body of knowledge for future researchers on liquidity, corporate governance and competitiveness of sugar firms.

Influence of Supply Chain Management On Performance of Textile Firms in Kenya, A Case of Nairobi City County

Influence of Supply Chain Management On Performance of Textile Firms in Kenya, A Case of Nairobi City County

Influence of Supply Chain Management on Performance of Textile Firms in Kenya, A Case of Nairobi City County

This study intended to establish the influence of Supply chain management on performance of textile firms in Nairobi City County.. This study used descriptive research design. Both qualitative and quantitative research design was used to complement each other. The target population of this study was 120 respondents from the textile firms in Nairobi City County. This is the unit of analyzes. My unit of observation was the seven textile firms. For this study the unit of analysis comprised: two senior textile managers, two senior procurement officers and one senior officer from finance in each of the firms. The study opted to do a census survey since the firms were very few. A purposive random sampling technique was used to pick the right respondents. Pilot test of 10 % was done for the purpose of confirming reliability and validity of the research instruments: Keywords: Claims, Delivery, Administration DOI : 10.7176/IEL/9-2-02 Publication date :March 31 st 2019

Influence Of Strategy Implementation On The Performance Of Maritime Cluster Firms In Kenya

The study of strategy implementation on the performance of maritime cluster firms has not been fully exhausted for economic growth despite its vast potential resources. In recent times, many countries near the oceans, seas, lakes, rivers and dams are exploiting their natural resources both off shore and on shore (for blue economy) with an aim of increasing their competitive advantage to create employment opportunities, wealth as new frontier by implementing maritime clusters strategy for economic growth and sustainability. This process helps them strengthen their national and regional competitiveness through clustering for their industrial development through processing, manufacturing and value addition of their products. This study seeks to stir up an academic curiosity in the field of maritime academic discipline and anticipates enhancing both policy and knowledge gaps in maritime related cluster firms. The findings of the research will be of importance to policy makers within the government and the maritime cluster firms as well as contribute to the body of knowledge as a reference material for future research works. The main objective of this study is to establish the influence of strategy implementation on performance of Maritime Cluster firms in Kenya and the specific objectives of this study are to establish the influence of strategic policies, strategic direction, organization structure, resource capability, technology innovation, firms’ size and years of operation on the performance of maritime cluster firms in Kenya. The research will allow collection of both quantitative and qualitative data and adopt descriptive research (statistical research) as well as inferential statistics designs in which variables of interest will not be controlled or manipulated. The target population of the study is 1386 maritime firms and the sample size of 94 firms which will be randomly selected as a basis for unit of analysis. Thus, the study will perform a pilot test to support reliability and validity tests based on 10% of the sample size of about 10 firms out of 94 firms which will not be included in the main study sample. Both primary and secondary data will be collected by use of questionnaires, structured interviews as instrument of data collection. Both factor analysis and correlation analysis will be used to determine the magnitude and direction of the association between research variables. The study will further perform hypothesis testing using ANOVA. The quantitative data collected will be analysed further through descriptive statistics such as mean, median, standard deviation supported by the statistical package for social science SPSS version 22 whereas the qualitative data will be analysed by use thematic analysis.

Influence of Occupational Accidents Moderated By Occupational Health and Safety Policy Regulations on Performance of Firms in Kenya

Performance in firms is an intricate affair and remains a major agenda in the corporate world. Researches have been carried out about factors that inform performance of firms, however the extent to which occupational accidents influence performance shaped by occupational health and safety policy regulations has received limited attention in the main stream firm researches. Occupational accidents in Kenya have witnessed an annual growth of 30% based on available statistics that continues to influence performance of firms negatively. The objective of this study was to establish the influence of occupational accidents on performance of firms in Kenya. The study was founded on two theories namely: Contingency theory and General Adaptation Syndrome theory. The study was anchored on Positivism and Interpretivism Paradigms realized by explanatory research design method. The target population was 2107 with a sample size of 414. Stratified, convenient and proportionate sampling techniques were used. Data was analyzed by descriptive statistics and partial least squares structural equation modeling aided by Warp PLS. v. 5 software. The findings showed that occupational accidents moderated by health and safety policy regulations to influence performance of firms at βeta coefficient of (β = -0.27, p = 0.020 < 0.05 Occupational health and safety policy regulation moderation effect was at β = -023, p = 0.04 < 0.05). The study recommends to the government and management of firms to incorporate occupational health and safety policy regulation in firms to mitigate occupational accidents hence influence performance of firms.