School of Business & Public Management
Permanent URI for this collectionhttps://repository.kcau.ac.ke/handle/123456789/43
Browse
7 results
Search Results
Item Capital adequacy, competition and liquidity creation of banks; evidence from Kenya(Emerald Publishing., 2024) Kariuki, Peter Wang'ombe.; Kinini, Dennis Muchuki.; Ocharo, Kennedy Nyabuto.Abstract Purpose The study seeks to evaluate the effect of capital adequacy and competition on the liquidity creation of Kenyan commercial banks. Design/methodology/approach Unbalanced panel data from 36 Kenyan commercial banks with licenses from 2001 to 2020 is used in the study. The generalized method of moments (GMM), a two-step system, is employed in the investigation. To increase the robustness and prevent erroneous findings, serial correlation tests and instrumental validity analyses are used. The methodology developed by Berger and Bouwman (2009) is used to estimate the commercial banks' levels of liquidity creation. Findings The study supports the financial fragility-crowding out hypothesis by finding a significant negative effect of capital adequacy on the liquidity creation of commercial banks. The research also identifies a significant inverse relationship between competition and liquidity creation, depicting competition's value-destroying effect. Practical implications A trade-off exists between capital adequacy and liquidity creation, which must be carefully evaluated as changes in capital requirements are considered. The value destroying effect of competition on liquidity creation presents a case for policy geared toward consolidating banks' operations through possible mergers and acquisitions. Originality/value To the best of the authors' knowledge, this is the first study to empirically offer evidence concurrently on the effect of competition and capital adequacy on the liquidity creation of commercial banks in a developing economy such as Kenya. Additionally, the authors employ a novel measure of competition at the firm level.Item Board attributes and sustainability reporting of selected listed nonfinancial firms in anglophone Sub-Saharan African countries: A multinomial logistic regression(ScienceDirect., 2024) Kariuki, Peter Wang'ombe.; Lewa, Elias Mwasambu.; Gatimbu, Karambu Kiende.Abstract Resource depletion, social inequality, and climate change are key among the global issues affecting the modern corporate world. Corporate sustainability is a major agenda at corporate boards. Stakeholders are increasingly demanding corporate responsibility in the wake of global resource depletion. Sustainability reporting has been experienced differently in different regions, with emerging economies being adversely stuck. Combating the bearing effects has been difficult due to a lack of synergy among the nations as well as a lack of harmonized corporate disclosure. Understanding the global socioeconomic and environmental concerns requires a close examination of the major determinants of sustainability reporting. Grounded on the agency, stakeholders, and legitimacy theory, this study aims to evaluate the influence of board attributes on sustainability reporting. Using a multinomial logistic regression model, the study assessed 110 nonfinancial firms listed in 10 Sub-Saharan African (SSA) countries from 2016 to 2021. The study analysed the influence of board attributes on sustainability reporting. The result indicates that board size, board meetings, board independence, and board gender diversity have a positive influence on sustainability reporting. The finding provides policy implications and insight into the need for more representative boards with increased gender diversity and independence. Additionally, an optimal frequency of board meetings is needed to strengthen oversight, efficacy, and transparency of sustainability reporting initiatives in SSA. Larger representative board sizes could be rewarded with tax concessions.Item Procurement practices and value for money in State Corporations in Kenya(PLOS One, 2024) Kariuki, Peter Wang'ombe.; Waci, John Muturi.; Mwirigi, Purity Mukiri.Abstract Public procurement related expenditure is approximately fifty to seventy percent of the national budget of developing countries and accounts for almost a third of the gross domestic product. Cognizant of the significant funds committed in public procurement, the quest for value for money is critical. This study sought to determine the effect of procurement practices on value for money in State Corporations in Kenya. Specifically, the study investigated the effect of procurement planning, supplier sourcing, supplies management and E-procurement on value for money. Data collected from 87 State Corporations in Kenya was used in this study. The results of the study indicated that procurement planning, supplier sourcing, supplies management and e-procurement positively and significantly affect the value for money in state corporations in Kenya. The study concluded that proper procurement practices positively and significantly affect the value for money in state corporations in Kenya. The findings of this study contribute to literature by providing an empirical examination on the impact of procurement practices and value for money from a developing country perspective.Item Market power, human capital efficiency and bank performance in Kenya.(Emerald Publishing., 2024) Kariuki, Peter Wang'ombe.Purpose The study evaluates the influence of human capital efficiency (HCE) and market power on bank performance. Design/methodology/approach The study employs two measures of bank performance: profitability and stability. Unbalanced panel data of 35 banks operating in Kenya for 2005–2020 collected from published financial statements is utilized. The study employs the feasible generalized least squares (FGLS) method in the analysis and the two-step system generalized method of moments (GMM) for robustness check. Findings The study affirms an inverted U-shaped relationship between market power and bank performance. The effect of market power on bank profitability is enhanced when a bank has highly efficient human capital. Further, HCE significantly impacts bank stability for banks with low HCE. Interestingly, a further increase in HCE narrows the net interest margins for banks with high HCE, conferring welfare benefits to customers as interest rate spreads shrink. Practical implications This study provides important insights into the role of human capital in bank performance. First, banks ought to invest in promoting HCE through training and development. As regulators root for bank consolidation, attention to HCE is imperative for fostering profitability and stability. Originality/value The study fills an essential gap in the literature by evaluating the effect of firm-level market power on bank performance in an emerging market. We adopt a novel stochastic frontier estimator to generate the Lerner index. Further, this is the first study known to the authors to evaluate the effect of market power on bank performance in the context of human capital efficiency variations.Item Ownership structure and financial distress: is the tale from Sub-Saharan Africa different?(Emerald Publishing., 2025) Kariuki, Peter Wang'ombe.; Abdulkadir, Mohammed.; Kariuki, Samuel Nduati.Abstract Purpose The paper investigates the effect of ownership structure on the financial distress of firms listed in sub-Saharan Africa. Design/methodology/approach Using secondary data from 106 non-financial firms listed in 9 selected SSA countries from 2016 to 2021, the research using paired t-tests and conditional logistic regression model analysed a sample of 174 distressed observations matched with 174 non-distressed observations. Findings T-tests determined significant differences between distressed and non-distressed groups concerning institutional, foreign, and local ownership. Conditional logistic results established that institutional, foreign, and state ownership significantly reduce distress. However, managerial ownership does not influence financial distress while a significant positive relationship is observed between local ownership and financial distress. Originality/value This is the first study to investigate the influence of ownership structure, including local ownership, on financial distress in SSA, employing a unique methodology of matched design and conditional logistic regression analysis. Furthermore, the paper presents cross-country evidence from emerging frontier markets, highlighting the importance of governance frameworks in firms’ stability.Item Sustainability reporting in sub-Sharan Africa: Does audit committee diversity and executive compensation matter?(2025) Kariuki, Peter Wang'ombe.; Lewa, Elias Mwasambu.; Gatimbu, Karambu Kiende.Abstract Climate change is a critical global issue that impacts the modern corporate world. Shareholders and stakeholders increasingly demand corporate responsibility, especially due to increasing global resource depletion. Sustainability reporting varies significantly from region to region, with emerging markets facing greater challenges. The lack of synergy between nations and the lack of harmonized corporate reporting hinders efforts to address these issues. Using a multivariate regression model, the study assessed 101 non-financial companies listed in ten sub-Saharan African (SSA) countries from 2016 to 2021. The data was extracted from the study period's audited annual and stand-alone sustainability reports. The influence of audit committee characteristics on social, environmental, economic and disclosure of composite sustainability reporting was assessed. Empirical findings indicate that audit committee independence has a positive effect on sustainability reporting, while the director compensation ratio has a negative effect on it. The result provides policy insights into sustainability disclosure levels in SSA and highlights the need for more independent audit committees. Additionally, it is recommended that executive compensation be aligned with sustainability performance metrics to improve the control and credibility of sustainability disclosuresItem Do board structure and director compensation influence financial reporting quality? Evidence from nonfinancial listed firms in Anglophone Sub-Saharan Africa.(Emerald Publishing., 2026) Kariuki, Peter Wang'ombe.; Chepkorir, Benaline.; Nyakarimi, Samuel Ngigi.Abstract Purpose This study explores the influence of board structure and director compensation on the financial reporting quality of nonfinancial firms listed in Sub-Saharan Africa. Design/methodology/approach Data from 110 firms listed on 10 securities exchanges from 2017 to 2023 were utilized. The Beneish M-Score serves as a proxy for earnings manipulation,employing a limited-dependent-variable estimation methodology with a multi-country panel dataset. Following the model specification tests, a random effect model was fitted. A pooled OLS model was employed for a robustness check. Findings The study finds that larger boards and higher directors’ compensation are associated with a lower likelihood of earnings manipulation, indicating improved monitoring efficacy. Additionally, larger firms are less likely to engage in earnings manipulation, underscoring the need to enhance monitoring of smaller firms. Originality/value This study bridges the gap in the literature by providing cross-country evidence of financial reporting quality in Sub-Saharan Africa, an underexplored emerging market context. It contributes to the corporate governance literature by providing empirical evidence on the influence of board structure and directors' compensation on financial reporting quality across countries.