| dc.description.abstract | Financial status of firms listed on Nairobi Securities Exchange from 2016 -2020 showed a decrease in revenue of Ksh -89.671 billion, a decrease in market capitalization of Ksh-294.91 billion and a downward trend in the NSE 20 share index indicated by -Ksh 1317.82 billion. These unfavorable trends can be attributed to global cases of fraudulent financial reporting and the recent failures of several Kenyan companies. Notably, approximately 17% of these firms have been delisted or suspended, raising concerns about their management and significantly eroding investor trust. Despite Kenya's efforts to foster a favorable business environment and advancements made by many listed firms on the NSE, the results have been mixed, with corporate governance practices, ownership structures, and firm sizes exacerbating these issues. The interplay between company size, ownership concentration, corporate governance practices, and financial performance remains unclear. There is no clear consensus on the impact of these practices on ROA or ROE respectively. However, ROE and ROA are two key and best standard most commonly measures used to determine how efficiently a company generates profits. Empirical evidence has linked financial performance to corporate governance practices and ownership concentration, making it crucial to comprehend their implications. Whereas these results reveal average performance of individual firms, these firms operate under different internal environments, including their sizes which determine their economies. Research demonstrates company size is a significant moderator, because it is a major factor in defining profitability of a firm because of concept of economies of scale. Main objective of this research was to investigate influence of corporate governance practices, ownership concentration, and Firm size on financial performance of listed firms at NSE. Specifically, to evaluate influence of corporate governance practices, ownership concentration and firm size on financial performance of listed firms at NSE, to establish the moderating influence of firm size on the relationship between corporate governance practice as well as ownership concentration and financial performance of listed firm at NSE. Agency theory, stakeholders' theory, and economies of scale theory serve as research foundation. This research is anchored on the positivist philosophical model. The study employed a correlation research design and focused on 66 listed firms at the Nairobi Securities Exchange between 2016 and 2020. To ensure data consistency, firms that were delisted, suspended, or listed after 2016 were excluded, resulting in a sample of 55 firms, generating 275 data points. The study adopted quota sampling approach, since it satisfied those criteria of my study, and collected secondary data from audited financial statements reports. The results underscore the significance of corporate governance practices on return on assets (ROA) {F (34.150, p=0.006)} and return on equity (ROE) {F=9.67, p=0.009, emphasizing their pivotal role in a company's success. Additionally, ownership concentration significantly affects ROA F=35.88, p=0.000)}, highlighting its impact on organizational profitability. Firm size plays a vital role in determining ROA, (β=0.842, p=0.364) while it exhibits no significant effect on ROE (β=0.018, p=0.725). Importantly, firm size moderates the relationship between corporate governance practices, ownership concentration, and financial performance, underlining the interconnectedness of these factors. The study recommends that public companies establish robust corporate governance practices to achieve defined objectives and enhance financial outcomes. Moreover, maintaining a strong ownership structure with a substantial number of shares, along with considering firm size, is vital for driving company performance. These findings are of particular relevance to investors, policymakers, regulatory authorities, and fellow researchers, offering insights that can inform their decisions and contribute to the advancement of financial practices and policies. | en_US |
