Exchange Rate and Financial Performance of Non-Financial Firms Listed at the Nairobi Securities Exchange, Kenya
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Date
2020-09
Authors
Wanjohi, John
Mungai, John
Journal Title
Journal ISSN
Volume Title
Publisher
Research Publish Journals
Abstract
The study sought to establish the effect of exchange rate on financial performance of Non Financial Firms
listed on the NSE, Kenya. In carrying out the study, Modern Portfolio Theory and Deflation Theory were adopted.
The research was based causal research design and the population comprises of the non-financial companies listed
at the NSE in Kenya as from January 2013 to December 2017 which are 41 in number. Therefore, the study was
based on a census. This research utilized panel data which was be extracted with the use of a secondary data
collection schedule. Data was analyzed using stata software version 14 where the analysis was based on descriptive
analysis and regression analysis. The findings of the reveal that exchange rate had a negative and significant effect
on financial performance of non financial firms listed on the NSE, Kenya. The study recommends that firms
should engage in cross border operations, that is, firms should have branches in foreign countries as these will aid
in cushioning the effect of currency depreciation on financial performance of firms. Further studies can utilize
other measures of financial performance such as return on equity and net interest margin. Other studies can also
consider internal factors such as firm size and how they affect the relationship between systematic risk factors and
non financial firms listed at the Nairobi Security Exchange, Kenya
Description
A Research Article in the International Journal of Management and Commerce Innovations
Keywords
Exchange Rate, Financial Performance., Modern Portfolio Theory, Stakeholders Theory, Non Financial Firms, Nairobi Securities Exchange
Citation
John Wanjohi and Dr. John Mungai (2020) Exchange rate and financial performance of non-financial firms listed at the Nairobi securities exchange, Kenya, International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online) Vol. 8, Issue 1, pp: (423-429), Month: April 2020 - September 2020,