Theses and Dissertations

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    Effect Of Macroeconomic Factors On The Performance Of The Bond Market In Kenya
    (KCA University, 2018) Mugo, Mwaniki
    A predictable and stable macro-economic environment leads to a robust bond markets in a country. The main objective of the study was to determine the effect of macroeconomic factors on the performance of the bond market in Kenya. Specifically, the study sought to determine the effect of foreign exchange rate on bond market performance in Kenya; to assess the effect of interest rate fluctuations on bond market performance in Kenya; and to investigate how inflation rate affects bond market performance in Kenya. This study adopted a longitudinal research design. The population in this study constituted the entire bond market in Kenya. The population of this study was drawn from quarterly bond market Index data for a period of 10 years from 2007 – 2017. Secondary data was collected for the study. The researcher obtained quarterly data for the variables. This study used descriptive and inferential statistics to analyze the data. Data analysis was done using STATAv13. Diagnostic tests were done to establish whether the model and variables are significant. The data was presented in form of tables. The long run regression results showed that the effect of macroeconomic factors on bond performance existed. The VECM findings showed that there was a short run relationship between the macroeconomic factors and bond performance. There was a negative effect of exchange rate and interest rate on bond performance. However, inflation rate displayed a positive relationship with bond performance in the short run. This study recommends that policies on exchange rate and interest rate be observed closely to control the variables as they affect bond performance negatively. The study also recommends a strict monetary policy and control of factors contributing to change in inflation rate in order to enhance bond performance. This study recommends further studies to be done using other macro-economic variables to understand their contribution to bond performance in Kenya.
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    Factors Influencing Public Debt In Kenya
    (Kca University, 2021) Owaga, Paul O.
    Public debt in Kenya continues to rise each year and now the country faces the possibility of plunging into a serious economic crisis due to inability of the government to repay what it owes. The purpose of this study was to investigate factors influencing public debt in Kenya. Specifically, the study sought to determine the influence of budget deficit, official development assistance, balance of trade and economic growth on public debt in Kenya. The study was anchored on the political business cycle theory, public choice theory and Ricardo’s theory on public debt. This study adopted a historical time series research design. The study was based on Kenya and data was collected quarterly for 20 years starting in year 2000 to 2019. A time series regression model was applied to analyze the collected data. This section provides the summary of the study findings. The summary is provided in relation to the research objectives. Regarding budget deficit, the study findings indicated that the first lag of budget deficit had a significant positive effect on public debt (β = 0.54, p = 0.009). The study findings also determined that the first lag of ODA did not have any significant influence on public debt (β = -0.15, p = 0.591). Concerning balance of trade, the findings showed that the first lag of balance of trade had a significant negative effect on public debt (β = -0.45, p = 0.008). However, the study findings indicate that the first lag of economic growth did not have any significant influence on public debt (β = -0.002, p = 0.971). Considering the findings made in the study, the study makes some vital recommendations. The governments should ensure that budget deficit is returned to sustainable levels and fiscal discipline observed. Regarding ODA, the government of Kenya should seek more multilateral and bilateral cooperation with development partners so that to enhance ODA as a large proportion of financing government recurrent and development expenditure. Further, the government of Kenya should enhance its balance of trade through expenditure-reduction measures that are intended to limit expenditure on imports and regulate demand, by putting downward pressure on demand, and thereby promoting private sector and household saving. Lastly, the study recommends stimulation of key sectors that contribute significantly to the economic growth such as agriculture, technology and manufacturing.