A Critical Analysis of Equity ownership Structure on Firm’s Performance: Case of Publicly Listed Companies in Kenya)

Abstract

The relationship of equity ownership mix and firm performance of a firm is an important area of study in the broader field of corporate finance which has received considerable attention in finance literature in the recent past. The objective of this study was to find out whether ownership identity has any influence in corporate performance of public companies listed in Nairobi Securities Exchange. The study was based on the Agency, Stewardship and Stakeholder theories which explained the interactions of different interested parties in the firm, conflicts that results and how they affect the performance of a firm. The target population of the study was public companies listed in Nairobi Securities Exchange and stratified random sampling design was used to identify and categories the firms, and then simple random sampling was used to identify the actual sample elements. A descriptive survey research design was primarily preferred as it was able to ensure proper construction of questions for soliciting required information, identification of individuals to be surveyed, means by which survey was conduted and summarizing of the data in a way that provided descriptive information. Data collection instrument used for the study include questionnaires with a guide, interviews and document analysis for secondary data derived from published company financial statement and Capital Market Authority periodic reports. For this study data collected was first be edited and then coded and categorized into different themes according to research variables. Qualitative data collected using the questionnaire was analyzed using descriptive statistics and represented in terms of tables, graphs and pie charts. Secondary data collected using content analysis was analyzed using inferential statistics in terms of correlation analysis application of Microsoft Excel analysis.

Keywords: Equity ownership Culture, Firm Performance, Publicly Listed Companies in Kenya. 1.0 Background of the Study