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- Item60 @ 60: Development of the Nairobi Securities Exchange(Strathmore University, 2014) Waweru, FreshiaThe Nairobi Securities Exchange (NSE) was established in 1954 and recently celebrated its 60th anniversary. However, the number of listed companies over this period have been minimal – currently, there are 63 listed companies but four has been suspended from trading. This study therefore sought to investigate the specific factors influencing company listings at the NSE. The study sought to establish: first, the factors that influences listing decision among the listed companies; and secondly; to establish why some companies, which have met the listing requirements threshold have not opted to publicly list despite the numerous efforts by the exchange. For the first objective, a regression analysis was carried out to determine which factors influences listing decision. The factors analyzed included; stock market liquidity, stock market volatility, the legal and regulatory framework, and political environment. The industry, market automation and taxation were used as control variables. The model was significant at 5% lever with an adjusted R squared of 68.8%. Political environment was the most significant variable followed by stock market liquidity and then stock market variability. The industry into which a company belongs to as well as the market automation were found to be insignificant at 5% significant levels. The second objective used questionnaires to establish why the non listed companies which have met the listing requirements were not yet listed. Most non-listed considered the legal and regulatory framework as too stringent and hence the leading hindrances to listing. The companies also considered the listing and maintenance costs as too high. In addition, most companies did not want the public scrutiny that accompanies a listed company. Other companies were family owned and wanted the status quo while others did not want dilution of ownership. Most of the non listed companies considered access to wide capital base as the leading reason why they could consider listing. To increase the number of listings therefore, the NSE as well as the Capital Markets Authority (CMA) should ensure that the market is liquid. This would ensure that the companies are able to access capital easily. The ongoing efforts to widen the number of products available should continue to attract more investors. Also, the rules and regulations should be reviewed to make sure they are not too stringent. There is need to review the listing costs which were considered as too high. The NSE should constantly communicate with the prospective companies the measures they are taking to encourage listings. The government should also ensure a stable political environment.
- Item60 @ 60: Development of the Nairobi Securities ExchangeWaweru, Freshia MugoThe Nairobi Securities Exchange (NSE) was established in 1954 and recently celebrated its 60th anniversary. However, the number of listed companies over th is period have been minimal - currently, there are 63 listed companies but four has been suspended from trading. This study therefore sought to investigate the specific factors influencing company listings at the NSE. The study sought to establish: first, the factors that influences listing decision among the listed companies; and secondly; to establish why some companies, which have met the listing requirements threshold have not opted to publicly list despite the numerous efforts by the exchange. For the first objective, a regression analysis was carried out to determine which factors influences listing decision. The factors analyzed included; stock market liquidity, stock market volatility, the legal and regulatory framework, and political environment. The industry, market . automation and taxation were used as control variables. The model was significant at 5% lever with an adjusted R squared of 68.8%. Political environment was the most significant variable followed by stock market liquidity and then stock market variability. The industry into which a company belongs to as well as the market automation were found to be insignificant at 5% significant levels. The second objective used questionnaires to establish why the non listed cornparues which have met the listing requirements were not yet listed. Most non-listed considered the legal and regulatory framework as too stringent and hence the leading hindrances to listing. The companies also considered the listing and maintenance costs as too high. In addition, most companies did not want the public scrutiny that accompanies a listed company. Other companies were family owned and wanted the status quo while others did not want dilution of ownership. Most of the non listed companies considered access to wide capital base as the leading reason why they could consider listing.
- ItemAdoption of internet banking : a customers perspectives(Strathmore University, 2013) Marugu, David KariukiThe purpose of this study is to determine the level of customer acceptance of online banking in Kenya and what factors influence their decisions to use it. The paper also uses the Technology Acceptance Model and applies it to bank customers in Kenya. The findings suggest that internet bank use increases insofar as customers perceive it as useful and not risky to use. The results show that bank customers in Kenya are more concerned about the security of transaction as most important factor in adopting online banking. The perceived usefulness is central because it determines whether the perceived ease of internet bank use will lead to increased use of the internet bank. However, reluctance to change is a major obstacle to the use of internet banking. This problem has been further encountered by banks in encouraging customers' adoption oftheir internet banking service. Implications for banks are that they need to put much effort not only into providing a more secure means of transaction, but also into explaining to their customers how the internet bank is useful to them.
- ItemAdoption of management accounting innovations in the Kenyan Manufacturing Industry(Strathmore University, 2017) Otieno, Ivy AchiengThe purpose of this study was to investigate the adoption of management accounting innovations in the Kenyan manufacturing industry. The study was grounded on three objectives; to determine the techniques of management accounting innovations adopted in the Kenyan Manufacturing Industry, to determine the extent of adoption of management accounting innovations in the Kenyan Manufacturing Industry, to establish the determinant factors in the process of adopting management accounting innovations in the Kenyan Manufacturing Industry. The study adopted both descriptive and explanatory research designs while targeting all the 25 manufacturing companies registered with the NSE. Questionnaires and interview guides were used as instruments of collecting both qualitative and quantitative data. Descriptive analysis method was deployed in carrying out data analysis whereas inferential analysis; regression and correlational analyses were applied to establish the nature of relationship between the variables. The results of the findings indicate that the recently developed MAis are less often used compared to the traditional techniques. The findings also depicted that the extent of adoption for the recently developed MAis is comparatively lower than other traditional techniques such as budgeting for planning and controlling costs. The companies also experience several challenges including high costs involved in adopting MAis and insufficient information on the MAis. The results also indicated that the determinant factors in the adoption of MAl include type of information to be captured, foreseen benefits of the innovations, nature of the business, availability of resources and initial cost to be incuned on the adopted innovation. The study established that the benefits of adoption of MAis are improved organisational operation efficiency including quality information and business response, better response within the sector' business environn1ent, improved organization's accountability and enhanced timeliness in reporting. The study concluded that techniques of MAl and benefits of diffusion of MAis strongly correlate with the extent of adoption of MAis while challenges of diffusion of MAis mildly correlates with the extent of adoption of MAis. The study further established that determinant factors in the diffusion of MAis has a weak correlation with the extent of adoption of MAis. The study recommends that the management of the various organisations should support the process of diffusing the MAl while the innovators should seek to provide enough information on the innovations and also establish good interactions with the adopters of the inventions. The findings of this study enhance the understanding of adoption of MAis in the Kenyan manufacturing industry hence providing managers and policyholders with relevant information that facilitate the development of strategies, regulations, guidelines and policies in relation to adoption MAis. The results of the study also aid further research on other aspects of MAl through offering reference to other researchers while also enhancing the contingency, institutional and diffusion of innovation theories.
- ItemAn Assessment of the extent effect of seasonal anomalies on efficiency of firms: evidence from Nairobi Securities Exchange(Strathmore University, 2022) Kamau, Njuguna EvansThe presence of security market anomalies provide an opportunity that market participants can exploit. The study tries to focus on the extent Month of the Year effect on efficiency of firms listed on the NSE particularly as an event based study on Covid-19 pandemic. Based on this study, the first objective of the study sought to examine the extent Month of the Year effect on efficiency of firms listed in the NSE. The study used closing monthly prices which were derived from NSE website for the period 2018-2021. From the results of the test carried out, the study established that Month of the Year effect was present and affected the efficiency of the market differently. January and December exhibited higher returns than other months. The study also sought to establish which stocks in the NSE were more prone to the extent month of the year effect on efficiency of firms. Also the study sought to establish which sectors in the NSE were more prone to the extent month of the year effect on efficiency of firms. A test of equality of mean was carried out to determine whether the mean returns for the different stocks and sectors were different. The findings of the test conducted indicated that the following stocks had more positive correlation to month of the year effect; Centum, Co-operative Bank, Absa, KCB, Scangroup, KenGen, KPLC, Scangroup and Stanbic compared to others. There was no single sector that was more prone to month of the year effect than the other. The findings from the analysis established that majority of trading participants had knowledge of market anomalies though also majority were affected during the Covid-19 pandemic. The results of the study contradict the efficient market hypothesis since the study has established month of the year effect is present.
- ItemAn assessment of the moderating role of employees’ cultural orientations amongst foreign manufacturing multinational companies in Kenya(AOSIS OpenJournals, ) Dimba, Beatrice; Rugimbana, RobertOver the last ten years or so, significant differences of opinion have emerged ar ound two related issues. How to adequately implement strategic human resources strategies to improve firm performance and, whether or not a ‘ bundle of HR best practices ’ exists that can be applied in all contexts with predictable outcomes. In regards to the first issue, the question of whether a direct link between strategic human resources management (SHRM) practices and firm performance exists, the arguments are equivocal. Some studies have demonstrated the existence of direct links between SHRM practices and firm performance (Edwards & Wright, 2001). Other studies (Dimba, 2010; Katou & Budhwar, 2006) have shown that SHRM practices do not lead directly to business performance but rather they influence employee motivation. In other words, it is employee outcomes that ultimately influence performance.
- ItemAn Evaluation of the role of credit risk management on profitability on commercial banks in Kenya(Strathmore University, 2021) Gachini, Emmy NyamburaThe effective management of risk is an important part of an inclusive approach to management of risk and is needed to ensure longevity of any banking institution. This study sought to examine credit risk management and its effect on the profitability of commercial banks in Kenya. Specifically the study addressed the following objectives, to examine the effect of Credit risk identification, the effect of Credit Risk Monitoring on profitability of listed commercial banks and to examine Credit risk analysis and its effect on profitability of their banks. The study was guided by three main theories namely Risk Management Theory, Information Asymmetry Theory and Agency Theory. This study adopted a quantitative research design, which helps in establishing the direction and magnitude of causal relationships. Measurements are taken on each variable over two or more distinct time periods which allowed to measure changes in chosen variables over time. The study found that different commercial banks consider credit risk identification, credit analysis and assessment, credit scoring mechanism, and risk monitoring and that credit analysts use the univariate accounting based credit scoring systems to compare key accounting ratios of specific clients versus industry ratios to show how a client's ratio differs from the industry standards or trends. At 5% level of significance and 95% level of confidence, capital adequacy ratio, loan to deposit ratio, non-performing loans ratio, management efficiency ratio and the net profit were all significant on profitability of commercial banks in Kenya. The study concluded that risk monitoring assists the banking administration to detect errors in good time and that internal auditors are greatly involved in the risk identification process where risk trigger questions are mostly used as identification methods. Statistically, there was a significant relationship between the effects of credit risk management and financial performance of commercial banks in Kenya. The study recommends that commercial banks should enhance usage of credit risk control practices in credit risk management to a very great extent.
- ItemAn Examination of staff layoffs in Kenya : evidence from companies quoted in the main investment market segment of the Nairobi Stock Exchange.Mwandembo, Christopher; Dr. Ruth KirakaStaff layoffs in Kenya seem like the most prevalent solutions available to management teams of companies faced with economic difficulty. This study targeted companies quoted in the Main Investment Market Segment of the Nairobi Stocks Exchange, with a view of finding out the drivers to downsizing; its outcomes (costs and benefits); other factors impacting these outcomes and ways of enhancing the success of the strategy. Consistent with the review of literature, the study found out that downsizing is motivated by economic, strategic and technological reasons. the positive outcomes are increased profitability, improved productivity, better strategic networks and leaner structures. on the flip side, the adverse effects include reduced staff morale, hampered innovative capacity, injured corporate reputation and loss of stock knowledge. In order to enhance the success of downsizing, business leaders may use financial incentives, pre and post retrenchment counseling to the exits and survivors respectively, and offering alternative training or sources of income. however, this study also found that the positive outcomes of downsizing may also be achieved using other ways. For example, increased profitability may be attained by boosting the number of units sold, enhancing market penetration or improving production efficiency. a review of outcomes of downsizing vis-a-vis their underlying drivers therefore suggests that staff layoffs in themselves may be more injurious to the firm than beneficial. positive outcomes can be achieved by other means. downsizing should therefore only be used as strategic initiative aimed at increasing productivity and /or efficiency while retaining the most valuable resource in production - the human capital.
- ItemAn examination of the policies and practices towards promoting SMEs development in Mwanza, TanzaniaNtakabanyula, Fredrick Phinias; Koshal, Jeremiah Dr.This study examines policies and practices toward promoting SMEs development in Mwanza, Tanzania. It was guided by three specific objectives; examining public policies and practices toward SMEs promotion, examining MFIs policies and practices toward SME promotion, as well as examining the contribution of Tanzania enterprise culture to SMEs development. The period from 2000 to 2009 is chosen due to the fact that numerous government policies and strategies were established and implemented in the country to stimulate the SME sector. The data was collected through interviews and questionnaires from SMEs operators, MFIs loan officers and government officials. The research finds that the establishment of SMEs is motivated by push factors. Such factors include lack of adequate formal education, lack of alternative payable employment and loss of jobs. The research also finds that Tanzania education system limits the creation of an enterprise culture. This is due to the fact that it prepares students or people for white collar jobs. Moreover, most MFIs policies and practices hinder the development of SMEs. This is shown by the placing of more emphasis on loan provisions and less on business skills generation. Lastly, the research finds that public policies and practices are not geared toward SMEs promotion. This is due to lack of clear guidance on what should be done to promote entrepreneurship development in the SME sector. The study suggests future research to be undertaken in examining public policies fostering entrepreneurship and its impact on the macro economy, the taxation system and interest rates charged to SMEs as it has been found to be a problem to the sector.
- ItemAnalysis of asymmetric and persistence in stock return volatility in the Nairobi Securities Exchange market phases(Strathmore University, 2014) Ogega, Haggai OwidiAsymmetric and persistence in the volatility of stock returns are very fascinating features of the behaviour of securities market. The persistence in volatility has a major effect on the future volatility of the security market under the influence of shocks and asymmetric features increases the volatility. This study examined salient features of financial time series of the stock market phases and the behaviour of stock return volatility in the Kenyan stock exchange during the market phases for the 20 share index and the 10 sampled companies over a period of 2003 to 2013. The results obtained shows that bullish market phase takes a longer time to die out than the bearish market phase and fluctuations in the series are variable in time with bear phase much more frequent than bull phase. The asymmetric effect, volatility persistence and clustering volatility behaviour of the volatility are fitted by the Fractionally Integrated Exponential GARCH (FIEGARCH) model. The volatility in the Kenyan stock market during both phases exhibits long-run memory and volatility asymmetry. Volatility estimate and diagnostic tests show volatility clustering, that is, shocks to the volatility process persist and the reaction to news arrival is asymmetrical, indicating that the effect of good and bad news is unsymmetrical with positive news impacting more during bullish and negative news more during bearish. In addition, the bullish phase exhibits a higher degree of long memory persistency meaning when there is a shock on volatility it takes a longer time to decay during bull than bear phase. The findings also lead to the rejection of efficiency market hypothesis (EMH) in NSE. The empirical results would be helpful to investors, policy makers and stock exchange administrators as these give indication of the behaviour of the volatility during the market phases. Furthermore, if traders know the behaviour during the phases, they will adjust to the market‟s moods.
- ItemAnalysis of factors affecting adoption of agency banking among micro, small and medium sized enterprises in Nairobi County - a case study of Gikomba Market(Strathmore University, 2019) Mukhule, Joyce Emmah NabwireAgency banking as a comparatively new model in Kenya has attracted attention from researchers due of the contribution it has towards financial inclusion. Lack of adequate finances has been identified as one of the challenges faced by MSMEs. Agency banking as an innovation seeks to mitigate the aspect of financial inclusion by taking banking services, which include but are not limited to provision of finance close to the customer. However, it is not conclusive as to what factors influence adoption of agency banking among potential customers. This led to the need to analyse possible factors that would affect adoption of agency banking. The first objective set out to analyse how perception influences adoption of agency banking whereas the second objective looked at social influence as a factor affecting adoption of agency banking. The research was descriptive targeting micro, small and medium enterprises in Nairobi County with special focus on Gikomba Market. Stratified Random Sampling was used and a structured questionnaire applied in data collection. The research findings concluded that social influence and perceived usefulness had a positive and significant impact on adoption of agency banking. The study recommends that there is need to have public participation through informative sessions as well as aggressive advertising and revamping of the agency model as a whole.
- ItemAn analysis of the challenges that multi-funded NGOs in Kenya face in financial reporting(2012) Ayuma, Chibole E.Financial reporting generally involves the public issuance of financial statements and their related notes and disclosures as set forth in accounting standards and requirements. NGO financial statements provide insight into the sources of funding, the cost of service delivery, and an organization's ability to operate in the future. The purpose of this study was to analyze the challenges multi-funded NGOs face in financial reporting. The study adopted an explanatory research design on a sample of eighty six senior finance personnel in multi- funded NGOs. Primary data was collected using questionnaires and data analyzed using descriptive and inferential statistics (t-test and chi-square test). In relation to donor requirements, the entire respondents acknowledge that donor requirements are not similar and all of them expect the organization to meet their (donor) requirements. From the findings, most donors require an annual audit of the funds donated. The analysis shows that varying donor and regulatory requirements create challenges in financial reporting. Varying submission of financial reports time-lines also creates challenges in financial reporting. From the findings, qualification inadequacy of the accounting staff will result in financial reporting challenges. All the respondents strongly agreed that investing in a good accounting system ensures good financial reporting. The findings indicate that inferior financial accounting systems will affect financial reporting and varied transaction and reporting currencies create challenges in financial reporting. The findings illustrated the need to incorporate the Standard Operating Reporting Procedures in financial reporting in NGOs to reduce these challenges. Further studies are recommended in finding out more challenges that affect financial reporting in multi-funded NGOs in Kenya as well as studies that will ascertain the effectiveness of Standard Operating Reporting Procedures in Kenya.
- ItemAn Analysis of the effect of business diversification on the financial performance of Commercial Banks in Kenya(Strathmore University, 2017) Kitisya, Daniel TamaleThis study sought to investigate the effect of business diversification on the financial performance of commercial banks in Kenya. The study was based on the fact that the banking sector in Kenya is highly regulated with significant business restrictions and attendant disclosures which have created incentives for the banks to diversify. However, the effect of business diversification on financial performance remains inconclusive with diverse studies finding minimal or no relationship while others finding positive significant effect. The study used a mixed research design where descriptive and quantitative research designs were used. The population for this study was all the forty two commercial banks in Kenya. Sources of data were both secondary and primary where quantitative techniques were used to undertake data analysis. To determine the relationship that existed between the variables, both multiple regression analysis and chi-square tests were adopted. The study found that business diversification significantly positively affected how the commercial banks in Kenya performed. The exact effect was however established to be largely dependent on bank-size. Business diversification significantly improved financial performance for small banks. Under medium sized banks category, only location diversification affected financial performance in a significant manner. For large banks all the four forms of business diversification did not have a significant effect on their financial performance. Respondents perceived business diversification to positively affect financial performance of commercial banks in Kenya to a moderate extent. The study was limited by examining financial performance by use of the CAMELS model in a developing country and being conducted in a single industry. Further, CAMELS was measured using a constructed index by data being obtained from the commercial banks’ annual audited reports. The study highlighted the need to develop business diversification strategies specifically tailored for each of the tiers of commercial banks with a focus on all forms of diversification for small banks, location diversification for the medium-sized banks and enhancement of existing forms of diversification among large commercial banks.
- ItemAn Analysis of the factors determining the choice of financing for micro, small and medium enterprises(Strathmore University, 2012) Shayo, Grace WanjikuThis study investigated the determinants of the choice of financing for Micro, Small and Medium sized enterprises. Data was collected from the Nairobi area with emphasis in the Industrial Area and Mombasa Road due to the concentration of MSMEs within these areas. This research was extensive both in scope and depth and attempted to fill in the gaps in the current literature. The outcomes provide valuable contribution to efforts made by the government, through the ministry of finance geared towards improving accessibility of capital to MSMEs. The government of Kenya and other developmental agencies has identified the need to empower MSMEs emergence and is working towards establishing programs and policies that will improve the accessibility of finance to MSMEs. Lastly, this research made a worthwhile contribution to MSMEs financing surveys and research that are currently ongoing or will be undertaken. This results from the growing importance of MSMEs to the economy of Kenya.
- ItemAnalysis of the factors influencing customer adoption of internet banking in Nairobi(Strathmore Univerity, 2017) Njeru, Agnes KarimiThe adoption of internet banking as a platform for offering banking services is on a steady rise globally. The purpose of this study was to examine the factors influencing customer adoption of internet banking in Kenya. The study utilized an Integrated Model Framework to investigate the factors that influence customer adoption of internet banking in Kenya. Variables were drawn from traditional models that offered separate and theoretically sound constructs, namely; Theory of Perceived Risk, Technological Acceptance Model, Theory of Planned Behavior, Theory of Reasoned Action, Diffusion of Innovation Theory and the ABC Model of Attitudes. The scope of the research was Kenyans who held an account with any of the commercial banks in Kenya between March and April 2017. Questionnaires were distributed to customers either inside banking halls or while entering or leaving the banking hall in sampled bank branches. A sample size of 384 customers was used. Data was analysed using SPSS software where various data analysis techniques including Descriptive statistics, Pearson’s Correlation Coefficients and Multiple Regression Analysis were employed. Results revealed that 47.1% of the respondents had adopted internet banking (IB) as of April 2017. Similarly, only 14.5% of the respondents had used IB frequently enough to infer full adoption. The model used in this study explained 40.9% of the variance in Adoption of Internet Banking in Nairobi. Further, Perceived Risk Facets, Diffusion of Innovation Factors, Technological Acceptance Factors, Planned Behavior Factors and Attitude were found to be predictors of Adoption of Internet Banking by customers in Nairobi. Perceived Risk Facet was found to be a negative predictor of internet banking adoption while all the other factors were found to be positive predictors of internet banking. The research may give some guidance to banks, KBA, CBK, Government of Kenya and other policy makers. For instance, policy makers may want to come up with policies and systems that mitigate risk associated with IB use thereby increasing its adoption and use. This research attempted to fill the knowledge gap existing regarding factors influencing customer adoption of internet banking in Kenya. The study suggests further research in the area to explore more factors that can explain the customer adoption of IB in Kenya as the overall research model did not explain most of the variance in the adoption of IB, suggesting that other factors exist that could account for adoption of IB in Kenya.
- ItemAn analysis of the Kenyan non-life insurance companies' technical efficiency(Strathmore University, 2013-06) Wachira, Ndungu WilsonThe main objective of this study is to analyze the technical efficiencies of the Kenyan nonlife insurance companies during the period 2006 - 20I0 the period that the Kenyan Insurance Industry saw many changes. Data Envelopment Analysis (DEA) a non-parametric method is used in evaluating the technical efficiencies of Non-life insurers in Kenya during the study period. The study uses Equity Capital, Debt Capital and Total Expenses as inputs in the DEA model, while Gross Premium and Investments Income are used as outputs. It was observed that Kenyan non-life insurers operated at an average overall technical efficiency of 84.7%, pure technical efficiency of 93% and scale efficiency of 90%. Further, the study tests the hypothesis relating to the roles played by each of the variable used in the technical efficiency analysis of the Kenyan non-life insurer. It was observed that Kenyan non-life insurers with higher market share measured by gross premium tend to have higher efficiencies, which implies that non-life insurers in Kenya could increase their efficiencies by increasing their market share. This study adds to the knowledge of efficiency in the insurance industry in Kenya and on the knowledge of efficiency in the world. From an academic perspective, the particular contribution of this study lies in computing the technical efficiencies of the Kenyan non-life insurance companies by use of DEA model.
- ItemAn analysis of the relationship between competitive strategies and organizational performance : a case of mobile telecommunication companies in Kenya(Strathmore University, 2014) Gathinji, Loice NyawiraThe main aim of the study was to examine the relationship between competitive strategies and organizational performance among firms in the mobile telecommunications industry in Kenya. The study identified the competitive strategies adopted by firms in the mobile telecommunication industry in Kenya, assessed the different levels of implementation of competitive strategies within the firms and lastly examined the relationship between competitive strategies and their performance, This study employed a descriptive survey design and collected data from 63 respondents out of the sample size of72 respondents selected purposively. The study revealed that in the telecommunication industry competition is high and product differentiation and low cost leadership are the most commonly used strategies. Other strategies include strategic alliance strategies and specific market focus strategies. The study concluded that the strategies adopted improved the overall organization performance and some of the key performance indicators that were influenced are: Sales and market share, customer retention, profitability and product developmentlinnovation. The study recommends that organizations should adopt strategies that allow them to achieve competitive advantage over others. Organizations that chose to adopt cost leadership strategy should focus on gaining competitive advantage by having the lowest cost in the industry. In order to achieve a low-cost advantage, an organization must have a low-cost leadership strategy, low-cost manufacturing, and a workforce committed to the low-cost strategy. Also the study recommends that when using product differentiation strategy, a company should focus its efforts on providing a unique product or service to enhance customer loyalty.
- ItemAnalysis of volatility spillover from market to market in the East Africa capital markets(Strathmore University, 2020) Were, Judith OsimboThe existence of spillover effects is created by co-movement in the international stock prices and for international portfolio diversification to be considered effective, the level of spillovers among stock markets need to be so low or close to nonexistent so that one national market that is performing poorly can be hedged by the international market. The study purposed to model volatility effects between stock markets in the East African securities markets and analyze the behavior of volatility spillover and volatility persistence. The study was guided by three theories, the Efficient Markey Hypothesis, Random Walk Hypothesis, and the Arbitrage Pricing Theory. Four markets in East Africa were studied namely NSE, USE, DSE and RSE. Data comprising of the closing daily stock indices was obtained from secondary sources for the sample period of 2009 to 2019. The Exponential Generalized Autoregressive Conditional Heteroscedastic (E-GARCH 1,1) model and the Glosten, Jagannathan and Runkle Generalized Autoregressive Conditional Heteroscedastic (GJR-GARCH 1,1) model were used to model the asymmetric volatility and volatility persistence between the markets and was estimated using R. These models were selected based on empirical results which showed the GJR-GARCH model as the best fit for RSE and the E-GARCH model as the best fit for NSE, DSE, and USE. The findings show existence of volatility asymmetry in NSE, USE, and DSE, RSE. NSE, USE, and DSE showed positive volatility asymmetry with fat right tails. For RSE, bad news has larger effects than good news. Further, the results also show the presence of volatility persistence in the four markets, with some experiencing larger persistence than others. This indicates that turbulence takes a long duration to settle down in these markets. The study recommends regime specific volatility spillover modelling or Granger causality models for further analysis.
- ItemAssessing the efficacy of business incubation in Nairobi County, Kenya: an incubatee’s perspective(Strathmore University, 2020) Tiren, DianaThis study was aimed at determining the efficacy of business incubation on firm success from an incubatee’s perspective. The study was conducted on firms in Nairobi County that have experienced business incubation. The general objective was addressed by four specific objectives. The first specific objective was to determine the effect of business incubation resources on incubatee firm success. The second was to examine the influence of entrepreneurial traits and competences on incubatee firm success. The third was to establish the moderating effect of challenges faced by incubatees in the business incubators. The fourth was to propose how business incubation can be improved. This study was underpinned by the human capital development theory, personality trait theory of entrepreneurship and networking theory. Questionnaires were administered to the respondents who were incubatees in incubation programmes in Nairobi County. The incubatees were identified through snowball sampling as well as through the incubator managers. The sample size was 384 incubatees. This sample was arrived at using the Cochran’s sample size formula for calculating sample size of unknown populations. Data analysis was done using descriptive and inferential statistics. The findings revealed first, that the greatest efficacy of business incubation can be explained when an entrepreneur is innovative, creative, a risk taker, reliable, and a good identifier and exploiter of new opportunities. Second, that business incubation resources, entrepreneurial traits and competences had a positive significant relationship with incubatee firm success in terms profitability and time at point of exit. Third, that the challenges facing the incubatees included lack of funding, inadequate incubator facilities and infrastructure, inadequate qualified employees at the incubator and weak incubator administration. However, the moderating effect of the challenges was not statistically significant. Fourth, that business incubation can be improved by increasing the availability of funding through government support, improving incubation facilities and services, and evaluating the performance of incubators. Key recommendations to the managers of business incubators and the policy makers is to create policies and enhance existing business incubation programmes to focus primarily on improving incubatee access to business training and skills, business networks, and financial resources. Additionally, incubator managers should improve on administration and staffing to enhance the business incubation experience.
- ItemAssessing the efficacy of price regulation on fuel pump prices in Kenya(Strathmore University, 2019-06) Miswa, Beryl AnyangoThe government through the Energy Regulatory Commission (ERC) sets the fuel price using a formula that takes into consideration the importation cost of crude or refined product, freight, local transportation costs, insurance, refinery processing fees (for crude oil), taxes and a profit margin. Oil Marketing Companies (OMCs) have been critical of the ERC’s pricing formula since it does not cover financing costs and the rising cost of doing business due to inflationary pressures. Margins in the sector are also negatively impacted by low margins and high finance costs due to the capital- intensive nature of the business. This study aimed to examine the efficacy of price regulation on the pricing of fuel in Kenya. It sought to assess the appropriateness of components of the pricing formulae, determine the various perspectives of the oil marketers in relation to the pricing of fuel, and examine the success and challenges of the pricing formulae/regulation. The study used descriptive research design, secondary data from the websites of ERC and the oil marketers and conducted in depth interview with top 7 OMC managers. The scope of the study was the ERC and the top seven OMCs based on their market share in Kenya. The findings of the study showed that; the introduction of oil price controls in Kenya had greatly affected the pump prices; the pricing regulation was not beneficial to OMC’s and the changes in oil prices due to the pricing formulae had led to increased and uncontrolled economic fluctuations. The study recommended that since the demurrage costs tend to be significant due to clearance delays experienced and the operations should be closely monitored to avoid such unnecessary delays and increased costs. The ERC should still consider changes in international crude oil prices and the changes in the US dollar Kenya shilling exchange rate in setting maximum oil retail prices for the four products. The study recommends a structure that establishes a clear link between retail prices and import prices based on import costs, distribution margins, demurrage costs, landed costs and tax levels.