PT-School of Economics

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Effects of capital structure on the cost of capital of firms listed at the Nairobi Securities Exchange, Kenya
(Kenyatta University, 2016) Kitukutha, Nicodemus
Capital structure has been a subject of interest to many researchers over a long period of time because of its importance in financial decision making. As a matter of fact, the amount of debt or equity a company holds significantly determines its survival in the long run. While keeping in mind that the overall objective of the firm is to maximize shareholder wealth and thus increase value, a firm is said to create value when it generates a return greater than its cost of capital. The purpose of this study was to investigate the effects of capital structure on the cost of capital of firms listed at the Nairobi Securities Exchange. The study objectives were; to establish the effects of tangibility on the cost of capital of firms listed at NSE, to determine the effect of equity financing on cost of capital of firms listed at NSE, to establish the effect of long term debt financing on cost of capital of firms listed at NSE and to establish the effect of short term debt financing on cost of capital of firms listed at NSE. The study was informed by trade-off theory and pecking order theory. The research design used was descriptive research design which used to describe the characteristics of a population or phenomenon being studied. The target population for this study were all listed companies on the NSE except commercial banks. A sample of the companies was drawn from 10 firms in the manufacturing and allied section. Data was collected using documentary guide. Data collected was analyzed using descriptive statistics which included means and standard deviations. Inferential statistics such as Pearson c correlation and multiple regression was used to test the hypothesis. The findings indicated that tangibility, equity financing and short term debt has a positive and significant effect on the cost of capital, while long term debts exhibited a negative and significant effect on cost of capital. The concluded that tangibility, equity financing and short term debt are important determinates of cost of capital. There is also need for equity financing so as to effectively monitor and coordinate managers so that they act in a manner that increases firm performance. There is also need for financial institutions to develop customized product that will increase firms need to use short term financing as a means to instill confidence by banks through frequent renewals.
Enrollment amd retention of children aged 3-5 years in public pre-schools in Eldama ravine division, Koibatek district, Baringo county
(Kenyatta University, 2015) Ruto, Jane
The overall goal of the Ministry of Education is to provide equal access to education for all the children irrespective of their socio economic status. This is in accordance with the government’s commitment to achieving Education for All by 2015. Despite the introduction of Community Support Grants, poor access and low retention rates are observed in preschool education in Arid and Semi Arid Lands (ASAL) regions, many rural areas, urban informal settlements and other low potential areas. Although various studies have been carried out on preschool education, it is still not clearly understood why some children drop out of school or are not enrolled at all even after the initiation of the Community Support Grants in Eldama-Ravine Division Koibatek District. Therefore, the purpose of this study was to investigate the factors that influence enrolment and retention of children aged 3-5 years in public preschools in Eldama Ravine Division, Koibatek District, Baringo County. The objectives of this study were to explore the public preschools enrolment and retention trends and to establish the factors that influence enrolment and retention of children in public preschools. A descriptive survey design was used in the study. The target population was the teachers and parents of 40 public preschools. Out of the 40 preschools, 12 of them were studied. A total of 54 respondents including 36 teachers and 18 parents were sampled for the study. The data was collected using questionnaires for the teachers and Focus Group Discussion for the parents. Descriptive statistics was used to describe the basic features of the data in the study. The collected data was analyzed by use of the Statistical Package for Social Sciences (SPSS). The results were presented using frequency tables and percentages. The study found that enrolment and retention rates in public preschools in Eldama Ravine Division Koibatek District declined and that the dropout rate increased. The problem of low enrolment and retention affects girls more than boys. The most predominant causes of declining rates of enrolment and retention of children in public preschools in the division are socio-economic, socio-cultural, school-based and environmental factors that can cause a threat to achievement of Education For All which calls for attention from all stakeholders. It was recommended that there is need for the government to initiate School Feeding Programmes in public preschools in order to enhance enrolment and retention and introduce Free Preschool Education so that dropout rates can reduce
Financial development and economic growth in Kenya; 1966-2012
(Kenyatta University, 2014) Kiplangat, Stanley
The Kenya Vision 2030 places a lot of importance on the financial sector as a key driver of a sustained Economic growth by the year 2030. This notwithstanding, the economy has recorded dismal and inconsistent growth since independence. The financial development indicators on the other hand have recorded an upward trend. What remains to be seen is whether there is a relationship between the finance indicators and economic growth and their causality that will inform macroeconomic policy in Kenya. A number of cross country studies that included Kenya have found out that financial development plays a significant role on Economic growth. While others have found that the real sector stimulates the financial sector, for example previous studies on Kenya have shown demand-following response. Furthermore some have found that the relationship runs in both ways while others have found no relationship at all. The focus of these studies has been mainly to do cross country comparisons using the Vector Error Correction Models (VECM) and Panel data analysis which is indeed suitable for more than one country comparison; few researchers have done case studies of individual countries. Different econometric methods on the same sample during the same period have also yielded different results. The objective of this study is to determine the long-term relationship and the causal relationship between financial development and economic growth, using a recently developed model; the Autoregressive Distributed Lag (ARDL) based on the AK growth model. The sources of data will be World Development Indicators (WDI), various sources of statistical abstracts and International Financial Statistics (IFS).
Financial sector innovations and interconnectedness: impact on productivity, value addition and economic growth in Kenya
(2015) Nato, Jacob Wanyonyi
This paper visualizes that the advances in technology vis-à-vis the globalization process have had externalities on the financial sector. The financial sector is leveraging on these developments to enhance service delivery to its clients, as well as secure returns arising from these advances. The growth in technology and the globalization process have contributed to innovations in the financial sector. These innovations have in turn enhanced at least the interconnectedness within the sector, and to the real economy. It then anticipates that this connection may be critical for policy purposes, that is, the sensitivity of the real economy to monetary policy, and also for macro prudential surveillance. Within this framework, it therefore proposes to establish a measure of Kenya’s financial innovations, the extent of connectedness within the financial sector and to the real economy, and whether the interconnectedness can be attributed to the innovations. An assessment of financial innovations and financial interconnectedness is therefore necessary to appreciate the linkages between them. Greater interconnectedness has however also been associated with possible risks of financial risks. Critical policy questions that need attention are: the financing and incidence of financial innovations, the productivity effects of the innovations, and a measure of likelihood of innovations in this sector. Policy questions relating to interconnectedness include: the multiplier effect, the sufficiency of the interconnectedness, and stability of a highly interconnected system. The objectives of this paper are to develop measures of the inter-connectedness of the financial sector and connectedness of the financial sector with the real sector. An assessment of the link between the two measures will also be done, and the contribution to productivity and growth. the share of finance in Kenya’s GDP. Kenya is a hub of financial services within the East African region and is well recognized globally for setting the pace in mobile money transfer services. Financial innovations have expanded at an unprecedented rate, much ahead of financial regulations. Whether the growing innovations can explain financial connectedness therefore needs to be explored. How do financial sector innovations impact on the connectedness of the financial sector? This paper brings these issues to the fore. SIGNIFICANCE OF THE STUDY Kenya’s financial system has evolved rapidly over the years. In the last two or three decades, we have witnessed the development of mobile money transfers (including M-PESA and AIRTEL Money services), the growth of branch banking or agent banking, investment in long term government bonds for development finance, and more so, were moving closer and closer to a cashless economy, as seen in preference for visa cards for payment of bills, and so on. It is therefore undisputed that with these rapid developments, and the progress still being made in the financial sector in terms of financial intermediation, a growing interconnection between the financial sector and that between the financial sector and real economy is being forged, either knowingly or unknowingly. The vision 2030 (Republic of Kenya, 2007), which lays out the development agenda for the country is the evidence that much more rapid growth in the financial sector needs to be fostered to attain the goals of the plan, key among them being the attainment of a ten percent economic growth status by the year 2030. The growing linkages between the financial sector and the real economy has been, and will still be an issue of interest for policy makers who seek to understand the nature of this interaction, and indeed, the level of connectedness that exists, if any. It is therefore an understatement to mention that such a measure will be highly sought for especially in the policy environment. The importance of connectedness in understanding fundamental macroeconomic and the likelihood of increasing systemic risk in the finance and insurance industry through a complex and time-varying network of relationships, have been emphasized by Diebold and Yilmaz (2011, p1), Billio et al (2012) and Summer (2013). Nevertheless, the need to quantify and measure this interconnection is useful for financial stability analysis.
Health equity in cancer treatment financing by households in Kenya
(2015) Ocholla, Maureen Achieng
The broad objective of this study will be to investigate health equity in cancer treatment financing by households in Kenya by focusing specifically on the progressivity of out-of-pocket expenditures for cancer care across households ranked by ability to pay in Kenya. Using secondary data from Kenyatta national hospital, Aga khan hospital and Kenya network of cancer organizations. The study will employ the use of concentration curves and Lorenz curve to achieve objective one and summary measures of progressivity (that is, kakwani index, concentration index and Gini coefficient) to achieve objective two. The study will also measure the re-distributive effect of OOPEs in cancer care and decompose it into vertical and horizontal equity. The data will be analyzed using ordinary least squares method
Impact of energy price liberalization on economic growth in Kenya
(2015) Luta, Victor Masese
Energy is an important component of the economy and its price affects its demand, supply and use. The use of energy is enclosed in the production function that leads to economic growth. Kenya has placed some reforms to stabilize and promote fair price and efficiency of energy in the economy. The findings of this study will elaborate on how the energy and economic growth of Kenya relate and the effect of energy price liberalization. Application and significance of the study This study explores the impact of energy price liberalization on economic growth in Kenya. By doing this, it will provide more empirical evidence on the energy and economic growth literature especially in relation to Kenya. By checking this effect, it will also provide more information on the magnitude of such relationships i.e. between energy and economy growth. The findings that will be got from this study will be useful to stakeholders in the energy sector and interested investors. Policy makers would also find this study important to them in formulating and reviewing existing energy and economic policies. The estimates from this study will also be important in identifying constraints that affect different components of the economy on the energy side and on the growth side. Given that energy is a fundamental component of Kenya’s Vision 2030, the findings of this study will be important in assessing the effectiveness of energy policies that have been implemented by stakeholders in the energy sector
The impact of monetary policy on economic growth and price stability in Kenya: 1992-2013
(Kenyatta University, 2014-11-28) Onderi, Vincent Nyambati; Njuru, Stephen Gitahi
.The government of Kenya's economic blueprint dubbed 'Kenya Vision 2030' acknowledges the importance of maintaining a stable macro-economic environment as it ensures stable levels of growth, employment creation and poverty reduction. While in d,eveloped economies, changes in monetary policy affect real economic activity in the short-run but only prices in the long-run, the question of whether these tendencies apply to developing countries remain open to debate. Literature is divided over monetary instrument to be employed in developing nations. While developed nations target interest rates as their intermediate targets, developing nations employ monetary aggregates as their intermediate targets mostly due to inefficient financial market and uncompetitive banking sector. Despite Kenya implementing monetary policy aimed at achieving stable prices and fostering economic growth, the economy has been reporting low economic growth and high rates of inflation. This inability of monetary policy to effectively maximize its objectives is as a result of the shortcomings of monetary instruments used in most developing countries including Kenya. Preceding from such a background, this study finds significance by seeking to inform policymakers which policy variable relates to output and prices; this would be instrumental in guiding the choice of monetary policy instruments applied, their overall effectiveness and thus assist the Central Bank of Kenya (CBK) in meeting its policy goals of low inflation and sustainable economic growth. The study employs Structural Vector Autoregression model (SVAR) to explore the effects of monetary policy on output and prices in Kenya for the period 1992-2013. The study will in addition, employ a battery of robust checks to ensure consistency in model specification and results

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