Determinants of the Growth of Venture Capital in Nairobi City County, Kenya
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Date
2023-11
Authors
Mwata, Valentina Ngele
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Expansion in the recent past. Many developed countries have so far embraced this leading the other hand, this is not the case with developing countries. This study sought to examine case study was Kenya. The study objectives were to examine the effect of financial innovations on the growth of venture capital in Nairobi city County, Kenya; to assess the influence of corporate governance on the growth of venture capital in Nairobi City County, Kenya; to establish the effect of diversification on the growth of venture capital in Nairobi City County, Kenya. Four theories underpinned the study that is the pecking order theory, portfolio theory and stakeholder theory and resource-based theory. Also, this study employed a descriptive design. The target population for this study was a total of 33 venture capital firms operating within Nairobi City County. The respondents were a total of 33fund's managers, and 76 employees from the firms making a total of 109 respondents. Questionnaires were used in primary data collection. The validity and reliability were ascertained through content validity where a research expert and supervisor were employed for validity while pilot test was conducted to ascertain reliability by calculating Cronbach alpha to measure the internal consistence. The threshold of the Cronbach's bar alpha is 0.7.Data collection was done where questionnaires were distributed to the respondents using the drop and pick method and the respondents were given two weeks' time to respond to the questionnaires. Collected data was then analysed using descriptive statistics, that is, frequencies, percentages, standard deviation, and mean. A Statistical Package for Social Sciences (SPSS) was used for data analysis. Findings were presented using bar charts, graphs, and diagrams for the purpose of easy analysis and interpretation. The study further conducted six diagnostic tests to ascertain normal distribution of data and to check internal consistence. Lastly, the study was done under strict ethical considerations that is an introduction letter was sought from the university, and research permit sought from the national commission for science, technology, innovation, and respondent. Also, the consent of the respondents was sought that is, they were requested not to reveal their identity. From the results, three variables financial innovations, corporate governance and diversification depicted a positive and significant influence on the growth of venture capital in Nairobi County, Kenya. This implied that holding the three factors (FI, CG, and D)constant, the growth of venture capital in Kenya improved by 0.542 units at 0.008 level of confidence. The study recommended that government should Streamline and simplify regulatory procedures to make it easier for venture capitalists to operate by introducing investor-friendly policies. Thus, study can be done to investigate the impact of regulatory policies and frameworks on the growth of venture capital in Kenya.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirements for the Award of Degree of Master of Business Administration (Finance Option) of Kenyatta University
Keywords
Determinants of growth, Venture capital, Nairobi city county, Kenya