Influence of Firm Financial Characteristics on Leverage in Automobile and Accessories Companies Listed in Nairobi Securities Exchange

Author(s)

Helen Wairimu ,

Download Full PDF Pages: 128-138 | Views: 805 | Downloads: 186 | DOI: 10.5281/zenodo.3456780

Volume 8 - March 2019 (03)

Abstract

Capital market is supposed to be the source of finances but in Africa, liquidity problems have inhibited this role. Statistically, most securities exchanges in Africa are low with the highest liquidity recorded in Africa being from Egypt at 37.9% and the third highest Khartoum Stock Exchange at 32.5%. Hence, the current evaluated the influence of firm financial characteristics on the leverage of the listed automobile and accessories firm in Nairobi securities exchange. Study findings revealed the positive moderating effect of operating cash flows on the influence of firm financial characteristics on the leverage of listed automobile and accessories companies in Nairobi securities exchange

Keywords

Financial characteristics, Firm size, Profitability, Tangibility, Growth opportunities

References

                         i.            Abdullah, N., Parvez, K., Karim, T., & Tooheen, B. (2015).  The Impact of Financial Leverage and Market Size on Stock Returns on the Dhaka Stock Exchange: Evidence from Selected Stocks in the Manufacturing Sector. International Journal of Economics, Finance and Management Sciences, 3(1), 10-15.

      ii.            Alghusin, A. (2015). Do Financial Leverage, Growth and Size Affect Profitability of Jordanian Industrial Listed Firms. International Journal of Academic Research in Business and Social Sciences, 5(4), 385-398.

    iii.            Alifani, A., & Nugroho, B. (2013). Proving Modigliani and Miller Theories of Capital Structure: The Research on Indonesian Cigarette Companies. International Journal of Economic Sciences, 2 (3),1-20.

     iv.            ASEA (2014). Association of African Securities Exchanges Annual Report.

       v.            ASEA (2015). Association of African Securities Exchanges Annual Report.

     vi.            Baron, R. M., & Kenny, D. A. (1986). The Moderator–Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations. Journal of personality and social psychology, 51(6),1173-1182.

   vii.            Bereźnicka, J. K. (2013). How Does Asset Structure Correlate with Capital Structure? – Cross-Industry and Cross-Size Analysis of the EU Countries, Universal Journal of Accounting and Finance, 1(1),19-28.

 viii.            Luigi, P., & Sorin, V. (2009). A Review of the Capital Structure Theories. Annals of Faculty of Economics, 3(1), 315–320.

     ix.            Modigiliani, F. & Miller, H. M. (1958). The Cost of Capital, Corporate Finance and the Theory of Investment.  American Economic Review, 48(3),261-297.

      x.            Mwangi, J. M. (2016). Effect of Financial Structure on Financial Performance of Firms Listed at East Africa Securities Exchanges, (PHD Thesis), Jomo Kenyatta University of Agriculture and Technology, School of Business, Nairobi, Kenya.

     xi.            NSE (2015). Nairobi Securities Exchange.

   xii.            NSE (2016). Nairobi Securities Exchange.

 xiii.            Padaya, B. (2016). Impact of Financial Leverage on Market Value Added: Empirical Evidence from India. Journal of Entrepreneurship, Business and Economics, 4(2), 40-58. 

 xiv.            Wooldridge, J. M. (2002). Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: MIT Press.

Cite this Article: