Factors influencing listing of Small and Medium Enterprises to Growth Enterprise Market Segment in Kenya
This study sought to investigate factors influencing listing of Small and Medium Enterprises (SMEs) on Growth Enterprise Market Segment (GEMS) in Kenya. The purpose of the study was to investigate whether the level of information awareness, business profile and managerial competence influence the listing of SMEs on GEMS. The study was grounded on two theories namely pecking order theory and agency cost theory which support best practices on listing at the stock exchange. The study adopted a descriptive and inferential research design in which questionnaires were used to collect primary data. In this study, factor analysis was used to express values of observed data as functions of a number of possible causes in order to find the most important. Each of the 26 parameters was looked at and placed to one of seven (7) factors depending on the percentage of variability which explained the total variability of each factor. From the factor analysis, all the variables indicated high construct validity since all exceeded the prescribed threshold of 0.40. The study recommended the need to improve managerial competence skills for SMEs through training and networking forums in order to increase the level of listing on GEMS. The study also reccommended formation of an SME hub at the NSE to offer trainings and networking session for the listed and the unlisted SMEs to interact, share knowledege and experiences. The study is particularly important in guiding NSE and Capital Market Authority (CMA) decision making in future policy formulation on SMEs listing on GEMS. Further, the study will be adopted by security exchanges around the World and inform the theory and practice of strategic management field by becoming a critical reference material.