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Browsing PhD Theses by Author "Mbithi, E. M."

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    Quality Corporate Risk Disclosure and determinants among listed non-financial firms in Kenya
    (Strathmore University, 2022) Mbithi, E. M.
    The recent occurrence of financial crisis and cases of corporate failure around the globe have heightened the demand for High-Quality Corporate Risk Disclosure (HQCRD). To meet this expectation, companies must demonstrate their stewardship to stakeholders by providing useful risk information. Nonetheless, concerns have been raised about the quality of Corporate Risk Disclosure (CRD) in developing countries. The study sought to identify factors explaining CRD behaviour in Kenya. The purpose is achieved by first establishing the meaning of the construct HQCRD to determine elements that constitute high-quality CRD. Secondly, it establishes the determinants of high-quality CRD to establish the applicability of multi-theoretical lens in explaining CRD behaviour, and, thirdly, exploring the moderating effect of the Kenya Companies Act of 2015 on the determinants of high-quality CRD. The study adopted a mixed-methods research design, specifically an explanatory sequential design. On one hand, quantitative analysis targeted listed non-financial firms in Kenya over the period 2008-2019 using panel data regression techniques. On the other hand, qualitative analysis targeted the preparers and users of the annual report through semi-structured interviews. The findings indicate that CRD quality is low and dispersed across the sampled firms in Kenya. This suggests that stakeholders seeking high-quality CRD in Kenya will not find annual reports sufficient to address their needs. The results of panel data regression indicate that firm size, leverage, firm growth, operating risk, board activity, board independence, foreign ownership and block ownership influence the quality of CRD (weighted measure). This confirms that CRD is complex as explained by a multiplicity of factors needed to achieve high quality. In addition, it confirms support for multi-theoretical lens proposed in the literature to study CRD in Kenya. These theories include agency theory, signalling theory, stakeholder theory, resource dependence theory, institutional theory and legitimacy theory. Furthermore, the results of qualitative analysis are mixed; some support quantitative results while others contradict them. Regarding the moderating role, implementation of the Kenya Companies Act of 2015 neutralised the effect of firm size and block ownership on CRD, whilst leverage, firm growth, operating risk, board independence and foreign ownership strengthened after the implementation. The study extends our understanding of CRD in several ways; first, by providing a common understanding of the meaning of CRD among stakeholders; secondly, by demonstrating the corporate determinants of CRD, particularly the moderating role of the Companies Act 2015, and thirdly, assessing the applicability of multi-theoretical lens in explaining CRD behaviour. The results will help policymakers and practitioners to understand the risk reporting needs of capital market participants, and potentially develop an informed mechanism to improve the quality of CRD. The study relied on extant literature and guidelines to develop the indices. However, the guidelines keep on changing as a result of considering other better ways of reporting. Thus, the results should be interpreted with caution because quality is dynamic. Future research should consider recent changes in guidelines and literature.