Firm Characteristics and Financial Leverage of Companies Listed on the Nairobi Securities Exchange, Kenya
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Date
2019
Authors
Dakane, Ibrahim Afey
Warui, Fredrick
Journal Title
Journal ISSN
Volume Title
Publisher
Stratford Peer Reviewed Journals and Book Publishing
Abstract
The Study sought to find out the effect of firm characteristics on financial leverage of Firms
listed in Nairobi Securities Exchange, Kenya. This study general objective was to find out, the
effect of Firm Characteristics on financial leverage of firms listed in NSE, Kenya. The target
Population was all the 65 firms listed in NSE, Kenya. This research was based on the
underpinning theories such as trade off theory, pecking order theory as well as Agency theory.
The study considered firms that have listed in NSE for the past fifteen years and utilised the
secondary data obtained from firms’ financial statements. The period under consideration was
2003-2017.The sample size used was only 32 firms who are levered firms. The secondary data
obtained from firms listed NSE financial statements was used to calculate the ratios which are
relevant. Panel regression analysis, correlation analysis and the panel data obtained was analysed
using descriptive statistics. The study found that firm size, profitability, tangibility, liquidity,
growth had a negative and significant relationship on financial leverage. The study recommends
that top management of listed firms should set up strategies of growth and expansion in sizes for
example growth in market segments and shares. The study also recommended that firms listed in
NSE should check their tangibility level
Description
An Article Published in Journal of Finance and Accounting
Keywords
Firm size, Growth, Tangibility, Liquidity, Profitability, Financial leverage, Nairobi Securities exchange