Capital Structure and Firm Financial Performance Nexus. How Much Difference Does Board Independence Make? Evidence from Manufacturing, Construction, and Allied Companies Listed at Nairobi Securities Exchange Kenya
Main Article Content
Keywords
Capital Structure, self-financing, board independence, financial performance, manufacturing, construction
Abstract
The purpose of this study was to examine the moderating effect of board independence on the relationship between self-financing and financial performance of manufacturing and construction firms listed at the Nairobi Securities Exchange in Kenya. This study employed a longitudinal and explanatory approach to investigate the correlation between self-financing, board independence, and financial performance. The adoption of a longitudinal research technique was deemed appropriate due to its focus on gathering quantitative data on a single variable over an extended period of time. The study design was optimal as it included longitudinal data covering a twenty-year timeframe from 2001 to 2021. Results revealed that Self-financing had a negative and significant effect on financial performance (β =-.007, p< 0.05). Board independence had a positive and significant effect on financial performance (β = 0.2145, p< 0.05). The study established that board independence moderated the relationship between self-financing and financial performance (β= .16939, p <0.05). Potential limitations may encompass constraints related to sample size, challenges in generalizability stemming from the specificity of the industry (manufacturing and construction). Managers ought to maintain an optimal level of debt to reduce potential adverse effects on financial performance. Moreover, promoting increased board independence may result in improved financial performance for companies. Regulators might consider highlighting or promoting greater board independence in listed manufacturing and construction companies to positively impact their financial performance. It is the recommendation of this study that future studies should explore these aspects across various industries or countries and conduct longitudinal analyses to gain a deeper understanding of how these relationships evolve over time.
References
Abdel-Basset, M., Ding, W., Mohamed, R., & Metawa, N. (2020). An integrated plithogenic MCDM approach for financial performance evaluation of manufacturing industries. Risk management, 22, 192-218.
Agyei, J., Sun, S., & Abrokwah, E. (2020). Trade-off theory versus pecking order theory: Ghanaian evidence. Sage Open, 10(3), 2158244020940987.
Ai, H., Frank, M. Z., & Sanati, A. (2020). The trade-off theory of corporate capital structure.
Alam, M. K., & Miah, M. S. (2021). Independence and effectiveness of Shariah supervisory board of Islamic banks: evidence from an emerging economy. Asian Review of Accounting, 29(2), 173-191.
Aliyu, A. N. (2019). Analysis of Debt Financing on Corporate Financial Performance. Lapai Journal of Economics, 3(2), 119-132.
Alzubi, K., & Bani-Hani, A. (2021). Determinants of debt-to-equity and its impact on the performance of industrial companies listed on amman stock exchange. Journal of Governance and Regulation/Volume, 10(4).
Arulraj, D. J., & Annamalai, T. R. (2020). Firms’ financing choices and firm productivity: Evidence from an emerging economy. International Journal of Global Business and Competitiveness, 15(1), 35-48.
Asghar, K. M., Rehan, R., Chhapra, I. U., & Sohail, A. B. (2021). Capital structure theories: A comprehensive review. Revista Geintec-Gestao Inovacao E Tecnologias, 11(3), 1562-1574.
Baysinger, B. D., & Butler, H. N. (2019). Corporate governance and the board of directors: Performance effects of changes in board composition. In Corporate Governance (pp. 215-238): Gower.
Bloomfield, J., & Fisher, M. J. (2019). Quantitative research design. Journal of the Australasian Rehabilitation Nurses Association, 22(2), 27-30.
Boivie, S., Withers, M. C., Graffin, S. D., & Corley, K. G. (2021). Corporate directors' implicit theories of the roles and duties of boards. Strategic Management Journal, 42(9), 1662-1695.
Bontempi, M. E., Bottazzi, L., & Golinelli, R. (2020). A multilevel index of heterogeneous short-term and long-term debt dynamics. Journal of Corporate Finance, 64, 101666.
Brown, G., Kakabadse, A., & Morais, F. (2020). The Independent Director in Society: Our current crisis of governance and what to do about it: Springer Nature.
Bukalska, E. (2019). Testing trade-off theory and pecking order theory under managerial overconfidence. International Journal of Management and Economics, 55(2), 99-117.
Bukvic, R., & Pavlovic, R. (2023). The Cash Flow Concept in Modern Financial Analysis of Internal Sources of Companies’ Investment Financing. Current Aspects in Business, Economics and Finance, 7, 111-132.
Butt, U. (2020). Profits, financial leverage and corporate governance. International Journal of Managerial Finance, 16(2), 203-223.
Choiriyah, C., Fatimah, F., Agustina, S., & Ulfa, U. (2020). The effect of return on assets, return on equity, net profit margin, earning per share, and operating profit margin on stock prices of banking companies in Indonesia Stock Exchange. International Journal of Finance Research, 1(2), 103-123.
Cline, B. N., Fu, X., & Tang, T. (2020). Shareholder investment horizons and bank debt financing. Journal of Banking & Finance, 110, 105656.
Coetzee, R. (2023). The Influence of Financial and Non-Financial Sustainability on Firm Performance. (Unpublished PhD Dissertation). University of Pretoria,
Dakhlallh, M. M., Rashid, N. M. N. N. M., Abdullah, W. A. W., & Dakhlallh, A. M. (2019). The effect of ownership structure on firm performance among Jordanian public shareholders companies: Board independence as a moderating variable. International Journal of Academic Research in Progressive Education and Development, 8(3).
Diana, H. I., & Maria, M. M. (2020). The importance Of profitability indicators In assessing The financial performance Of economic entities. The Annals of the University of Oradea, 29(2020), 219.
Doan, T. (2020). Financing decision and firm performance: Evidence from an emerging country. Management Science Letters, 10(4), 849-854.
Fasasi, K. A., Ahmad, A. A., & Nnejiwuihe, F. C. (2022). Effect of debt financing on profitability of listed agricultural companies in nigeria. International Journal of Education, Business and Economic Research (IJEBER), 2(5), 66-74.
Fikasari, R., & Bernawati, Y. (2021). Internal or external financing: New evidence on investor reaction in Indonesian manufacturing firms. Journal of Accounting and Investment, 22(2), 242-253.
Frank, M. Z., Goyal, V. K., & Shen, T. (2020). The pecking order theory of capital structure: Where do we stand?
Gajdosikova, D., & Valaskova, K. (2022). The impact of firm size on corporate indebtedness: a case study of Slovak enterprises. Folia Oeconomica Stetinensia, 22(1), 63-84.
Gartenberg, C., Prat, A., & Serafeim, G. (2019). Corporate purpose and financial performance. Organization Science, 30(1), 1-18.
Ghosh, B. N. (2019). Dependency theory revisited: Routledge.
Gillan, S. L., Koch, A., & Starks, L. T. (2021). Firms and social responsibility: A review of ESG and CSR research in
corporate finance. Journal of Corporate Finance, 66, 101889.
Hillier, D., Ross, S., Westerfield, R., Jaffe, J., & Jordan, B. (2019). Corporate Finance, 4e: McGraw Hill.
Hosny, K., & Elgharbawy, A. (2022). Board diversity and financial performance: empirical evidence from the United
Kingdom. Accounting Research Journal, 35(4), 561-580.
Ibrahim, U. A., & Isiaka, A. (2020). Effect of financial leverage on firm value: Evidence from selected firms quoted on the Nigerian stock exchange. European Journal of Business and Management, 12(3), 124-135.
Isaac, R. (2022). Contribution of corporate governance on performance of listed companies in Kenya. European Journal of Business and Management Research, 7(1), 104-112.
Islam, H., Rahman, J., Tanchangya, T., & Islam, M. A. (2023). Impact of firms’ size, leverage, and net profit margin on firms’ profitability in the manufacturing sector of Bangladesh: An empirical analysis using GMM estimation. Journal
of Ekonomi, 5(1), 1-9.
Jensen, M. C., & Meckling, W. H. (2019). Theory of the firm: Managerial behavior, agency costs and ownership structure. In Corporate governance (pp. 77-132): Gower.
John, S. (2021). Financial Leverage And Financial Performance: Evidence From Petroleum Companies Listed On The Nigerian Capital Market. Journal of Banking & Finance, 11(9), 1-12.
Kasasbeh, F. I. (2021). Impact of financing decisions ratios on firm accounting-based performance: evidence from Jordan listed companies. Future Business Journal, 7(1), 15.
Kermani, A., & Ma, Y. (2020). Two tales of debt. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670476
Khan, M. T., Al‐Jabri, Q. M., & Saif, N. (2021). Dynamic relationship between corporate board structure and firm performance: Evidence from Malaysia. International Journal of Finance & Economics, 26(1), 644-661.
Kilincarslan, E. (2021). The influence of board independence on dividend policy in controlling agency problems in family firms. International Journal of Accounting & Information Management, 29(4), 552-582.
Kim, H.-D., Kim, Y., & Mantecon, T. (2019). Short-term institutional investors and agency costs of debt. Journal of Business Research, 95, 195-210.
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2020). Financial accounting: Tools for business decision making: John Wiley & Sons.
Kulikov, A., Alabed Alkader, N., Panaedova, G., Ogorodnikov, A., & Rebeka, E. (2023). Modelling Optimal Capital Structure in Gas and Oil Sector by Applying Simulation Theory and Programming Language of Python (Qatar Gas Transport Company). Energies, 16(10), 4067.
Larcker, D., & Tayan, B. (2020). Corporate governance matters: FT Press.
Lartey, T., Danso, A., & Boateng, A. (2021). Co-opted boards and capital structure dynamics. International Review of Financial Analysis, 77, 101824.
Lea, S. E. (2021). Debt and overindebtedness: Psychological evidence and its policy implications. Social Issues and Policy Review, 15(1), 146-179.
Li, Y. (2020). The effects of external debt financing and internal financing on firm performance: empirical evidence from automobile listed firms. University of Twente,
Mandipa, G., & Sibindi, A. B. (2022). Financial performance and working capital management practices in the retail sector: empirical evidence from South Africa. Risks, 10(3), 63.
Masulis, R. W., & Zhang, E. J. (2019). How valuable are independent directors? Evidence from external distractions. Journal of Financial Economics, 132(3), 226-256.
Merendino, A., & Melville, R. (2019). The board of directors and firm performance: empirical evidence from listed companies. Corporate Governance: The international journal of business in society, 19(3), 508-551.
Mubeen, R., Han, D., Abbas, J., & Hussain, I. (2020). The effects of market competition, capital structure, and CEO duality on firm performance: a mediation analysis by incorporating the GMM model technique. Sustainability, 12(8), 3480.
Nazir, A., Azam, M., & Khalid, M. U. (2021). Debt financing and firm performance: empirical evidence from the Pakistan Stock Exchange. Asian Journal of Accounting Research, 6(3), 324-334.
Nguyen, H. T., & Nguyen, A. H. (2020). The impact of capital structure on firm performance: Evidence from Vietnam. Journal of Asian Finance, Economics and Business, 7(4), 97-105.
Nili, Y. (2020). The fallacy of director independence. Wis. L. Rev., 491.
Nurinfiaa, I., & Damayanti, Y. E. (2023). Effect of Capital Adequacy Ratio (CAR), Net Interest Margins (NIM), and Loans to Deposit Ratio (LDR) on Profitability (Case Study in Banking Companies Listed on the Exchange Effect Indonesia
Period 2017-2019). IJMRA: International Journal of Multidisciplinary Research and Analysis, 06 (01), 280–287. In.
Nyakundi, J. (2021). Financial Planning Practices And Financial Performance of Manufacturing Companies Listed in Nairobi Security Exchange, Kenya. University of Nairobi,
Onyebuchi, A. E. (2023). Capital Market and Manufacturing Sector Capacity Utilization in Nigeria 1990 To 2022. POLAC Economics Review, 3.
Pfeffer, J. (2019). Size and composition of corporate boards of directors: The organization and its environment. In Corporate governance (pp. 53-64): Gower.
Pham, C. D. (2020). The effect of capital structure on financial performance of Vietnamese listing pharmaceutical
enterprises. The Journal of Asian Finance, Economics and Business, 7(9), 329-340.
Poletti‐Hughes, J., & Martinez Garcia, B. (2022). Leverage in family firms: The moderating role of female directors and board quality. International Journal of Finance & Economics, 27(1), 207-223.
Pryshchepa, O. (2021). Disciplining entrenched managers through corporate governance reform: Implications for risk‐taking behavior. Corporate Governance: An International Review, 29(4), 328-351.
Putri, I. G. A. P. T., & Rahyuda, H. (2020). Effect of capital structure and sales growth on firm value with profitability as mediation. International research journal of management, IT and Social Sciences, 7(1), 145-155.
Ramli, N. A., Latan, H., & Solovida, G. T. (2019). Determinants of capital structure and firm financial performance—A PLS-SEM approach: Evidence from Malaysia and Indonesia. The Quarterly Review of Economics and Finance, 71,
148-160.
Rashid Khan, H. u., Khidmat, W. B., Hares, O. A., Muhammad, N., & Saleem, K. (2020). Corporate governance quality, ownership structure, agency costs and firm performance. Evidence from an emerging economy. Journal of Risk and Financial Management, 13(7), 154.
Riofrio, M. I. P., Granizo, G. G. U., Mayorga, M. d. l. Á. H., & Alarcón, C. H. M. (2023). Key Performance Indicators For Business Financial Perspective. Journal of Namibian Studies: History Politics Culture, 34, 3917-3940.
Salmana, M. D. (2020). The Role of Self-financing in Improving the Quality of Services Provided in the Government Health Sector in Iraq. International Journal of Innovation, Creativity and Change, 13(12).
Sari, I. A. G. D. M., & Sedana, I. B. P. (2020). Profitability and liquidity on firm value and capital structure as intervening variable. International research journal of management, IT and Social Sciences, 7(1), 116-127.
Shan, Y. G. (2019). Managerial ownership, board independence and firm performance. Accounting Research Journal, 32(2), 203-220.
Tanko, U. M., Siyanbola, A. A., Bako, P. M., & Dotun, O. V. (2021). Capital structure and firm financial performance: Moderating effect of board financial literacy in Nigerian listed non-financial companies. Journal of Accounting Research, Organization and Economics, 4(1), 48-66.
Tannady, H., Pahlawi, N., Hernawan, M. A., Arta, D. N. C., & Yusuf, S. D. (2023). Role of Stock Performance as an Intervening Variable in a Relationship Between Profitability, Leverage, Growth and Company Value. JEMSI (Jurnal
Ekonomi, Manajemen, dan Akuntansi), 9(2), 220-225.
Tanui, P. J., Omare, D., & Omondi, M. A. (2021). Asset Structure, Corporate Governance, Capital Structure and Financial Performance of Construction and Manufacturing Firms Listed In Kenya.
Thakolwiroj, C., & Sithipolvanichgul, J. (2021). Board characteristics and capital structure: evidence from Thai listed companies. The Journal of Asian Finance, Economics and Business, 8(2), 861-872.
Tikasari, N., & Surjandari, D. A. (2020). The Determinant of Market-Based Performance: Evidence from Manufacturing Companies in Indonesia. Mediterranean Journal of Social Sciences, 11, 20.
Vitolla, F., Raimo, N., & Rubino, M. (2020). Board characteristics and integrated reporting quality: An agency theory perspective. Corporate Social Responsibility and Environmental Management, 27(2), 1152-1163.
Watt, D., Langa, A., & Maclean, E. (2022). Governance and the Role of the Board. In A Director's Guide to Governance in the Boardroom (pp. 1-54): Routledge.
Yıldırım, D., & Çelik, A. K. (2021). Testing the pecking order theory of capital structure: Evidence from Turkey using panel quantile regression approach. Borsa Istanbul Review, 21(4), 317-331.
Agyei, J., Sun, S., & Abrokwah, E. (2020). Trade-off theory versus pecking order theory: Ghanaian evidence. Sage Open, 10(3), 2158244020940987.
Ai, H., Frank, M. Z., & Sanati, A. (2020). The trade-off theory of corporate capital structure.
Alam, M. K., & Miah, M. S. (2021). Independence and effectiveness of Shariah supervisory board of Islamic banks: evidence from an emerging economy. Asian Review of Accounting, 29(2), 173-191.
Aliyu, A. N. (2019). Analysis of Debt Financing on Corporate Financial Performance. Lapai Journal of Economics, 3(2), 119-132.
Alzubi, K., & Bani-Hani, A. (2021). Determinants of debt-to-equity and its impact on the performance of industrial companies listed on amman stock exchange. Journal of Governance and Regulation/Volume, 10(4).
Arulraj, D. J., & Annamalai, T. R. (2020). Firms’ financing choices and firm productivity: Evidence from an emerging economy. International Journal of Global Business and Competitiveness, 15(1), 35-48.
Asghar, K. M., Rehan, R., Chhapra, I. U., & Sohail, A. B. (2021). Capital structure theories: A comprehensive review. Revista Geintec-Gestao Inovacao E Tecnologias, 11(3), 1562-1574.
Baysinger, B. D., & Butler, H. N. (2019). Corporate governance and the board of directors: Performance effects of changes in board composition. In Corporate Governance (pp. 215-238): Gower.
Bloomfield, J., & Fisher, M. J. (2019). Quantitative research design. Journal of the Australasian Rehabilitation Nurses Association, 22(2), 27-30.
Boivie, S., Withers, M. C., Graffin, S. D., & Corley, K. G. (2021). Corporate directors' implicit theories of the roles and duties of boards. Strategic Management Journal, 42(9), 1662-1695.
Bontempi, M. E., Bottazzi, L., & Golinelli, R. (2020). A multilevel index of heterogeneous short-term and long-term debt dynamics. Journal of Corporate Finance, 64, 101666.
Brown, G., Kakabadse, A., & Morais, F. (2020). The Independent Director in Society: Our current crisis of governance and what to do about it: Springer Nature.
Bukalska, E. (2019). Testing trade-off theory and pecking order theory under managerial overconfidence. International Journal of Management and Economics, 55(2), 99-117.
Bukvic, R., & Pavlovic, R. (2023). The Cash Flow Concept in Modern Financial Analysis of Internal Sources of Companies’ Investment Financing. Current Aspects in Business, Economics and Finance, 7, 111-132.
Butt, U. (2020). Profits, financial leverage and corporate governance. International Journal of Managerial Finance, 16(2), 203-223.
Choiriyah, C., Fatimah, F., Agustina, S., & Ulfa, U. (2020). The effect of return on assets, return on equity, net profit margin, earning per share, and operating profit margin on stock prices of banking companies in Indonesia Stock Exchange. International Journal of Finance Research, 1(2), 103-123.
Cline, B. N., Fu, X., & Tang, T. (2020). Shareholder investment horizons and bank debt financing. Journal of Banking & Finance, 110, 105656.
Coetzee, R. (2023). The Influence of Financial and Non-Financial Sustainability on Firm Performance. (Unpublished PhD Dissertation). University of Pretoria,
Dakhlallh, M. M., Rashid, N. M. N. N. M., Abdullah, W. A. W., & Dakhlallh, A. M. (2019). The effect of ownership structure on firm performance among Jordanian public shareholders companies: Board independence as a moderating variable. International Journal of Academic Research in Progressive Education and Development, 8(3).
Diana, H. I., & Maria, M. M. (2020). The importance Of profitability indicators In assessing The financial performance Of economic entities. The Annals of the University of Oradea, 29(2020), 219.
Doan, T. (2020). Financing decision and firm performance: Evidence from an emerging country. Management Science Letters, 10(4), 849-854.
Fasasi, K. A., Ahmad, A. A., & Nnejiwuihe, F. C. (2022). Effect of debt financing on profitability of listed agricultural companies in nigeria. International Journal of Education, Business and Economic Research (IJEBER), 2(5), 66-74.
Fikasari, R., & Bernawati, Y. (2021). Internal or external financing: New evidence on investor reaction in Indonesian manufacturing firms. Journal of Accounting and Investment, 22(2), 242-253.
Frank, M. Z., Goyal, V. K., & Shen, T. (2020). The pecking order theory of capital structure: Where do we stand?
Gajdosikova, D., & Valaskova, K. (2022). The impact of firm size on corporate indebtedness: a case study of Slovak enterprises. Folia Oeconomica Stetinensia, 22(1), 63-84.
Gartenberg, C., Prat, A., & Serafeim, G. (2019). Corporate purpose and financial performance. Organization Science, 30(1), 1-18.
Ghosh, B. N. (2019). Dependency theory revisited: Routledge.
Gillan, S. L., Koch, A., & Starks, L. T. (2021). Firms and social responsibility: A review of ESG and CSR research in
corporate finance. Journal of Corporate Finance, 66, 101889.
Hillier, D., Ross, S., Westerfield, R., Jaffe, J., & Jordan, B. (2019). Corporate Finance, 4e: McGraw Hill.
Hosny, K., & Elgharbawy, A. (2022). Board diversity and financial performance: empirical evidence from the United
Kingdom. Accounting Research Journal, 35(4), 561-580.
Ibrahim, U. A., & Isiaka, A. (2020). Effect of financial leverage on firm value: Evidence from selected firms quoted on the Nigerian stock exchange. European Journal of Business and Management, 12(3), 124-135.
Isaac, R. (2022). Contribution of corporate governance on performance of listed companies in Kenya. European Journal of Business and Management Research, 7(1), 104-112.
Islam, H., Rahman, J., Tanchangya, T., & Islam, M. A. (2023). Impact of firms’ size, leverage, and net profit margin on firms’ profitability in the manufacturing sector of Bangladesh: An empirical analysis using GMM estimation. Journal
of Ekonomi, 5(1), 1-9.
Jensen, M. C., & Meckling, W. H. (2019). Theory of the firm: Managerial behavior, agency costs and ownership structure. In Corporate governance (pp. 77-132): Gower.
John, S. (2021). Financial Leverage And Financial Performance: Evidence From Petroleum Companies Listed On The Nigerian Capital Market. Journal of Banking & Finance, 11(9), 1-12.
Kasasbeh, F. I. (2021). Impact of financing decisions ratios on firm accounting-based performance: evidence from Jordan listed companies. Future Business Journal, 7(1), 15.
Kermani, A., & Ma, Y. (2020). Two tales of debt. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3670476
Khan, M. T., Al‐Jabri, Q. M., & Saif, N. (2021). Dynamic relationship between corporate board structure and firm performance: Evidence from Malaysia. International Journal of Finance & Economics, 26(1), 644-661.
Kilincarslan, E. (2021). The influence of board independence on dividend policy in controlling agency problems in family firms. International Journal of Accounting & Information Management, 29(4), 552-582.
Kim, H.-D., Kim, Y., & Mantecon, T. (2019). Short-term institutional investors and agency costs of debt. Journal of Business Research, 95, 195-210.
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2020). Financial accounting: Tools for business decision making: John Wiley & Sons.
Kulikov, A., Alabed Alkader, N., Panaedova, G., Ogorodnikov, A., & Rebeka, E. (2023). Modelling Optimal Capital Structure in Gas and Oil Sector by Applying Simulation Theory and Programming Language of Python (Qatar Gas Transport Company). Energies, 16(10), 4067.
Larcker, D., & Tayan, B. (2020). Corporate governance matters: FT Press.
Lartey, T., Danso, A., & Boateng, A. (2021). Co-opted boards and capital structure dynamics. International Review of Financial Analysis, 77, 101824.
Lea, S. E. (2021). Debt and overindebtedness: Psychological evidence and its policy implications. Social Issues and Policy Review, 15(1), 146-179.
Li, Y. (2020). The effects of external debt financing and internal financing on firm performance: empirical evidence from automobile listed firms. University of Twente,
Mandipa, G., & Sibindi, A. B. (2022). Financial performance and working capital management practices in the retail sector: empirical evidence from South Africa. Risks, 10(3), 63.
Masulis, R. W., & Zhang, E. J. (2019). How valuable are independent directors? Evidence from external distractions. Journal of Financial Economics, 132(3), 226-256.
Merendino, A., & Melville, R. (2019). The board of directors and firm performance: empirical evidence from listed companies. Corporate Governance: The international journal of business in society, 19(3), 508-551.
Mubeen, R., Han, D., Abbas, J., & Hussain, I. (2020). The effects of market competition, capital structure, and CEO duality on firm performance: a mediation analysis by incorporating the GMM model technique. Sustainability, 12(8), 3480.
Nazir, A., Azam, M., & Khalid, M. U. (2021). Debt financing and firm performance: empirical evidence from the Pakistan Stock Exchange. Asian Journal of Accounting Research, 6(3), 324-334.
Nguyen, H. T., & Nguyen, A. H. (2020). The impact of capital structure on firm performance: Evidence from Vietnam. Journal of Asian Finance, Economics and Business, 7(4), 97-105.
Nili, Y. (2020). The fallacy of director independence. Wis. L. Rev., 491.
Nurinfiaa, I., & Damayanti, Y. E. (2023). Effect of Capital Adequacy Ratio (CAR), Net Interest Margins (NIM), and Loans to Deposit Ratio (LDR) on Profitability (Case Study in Banking Companies Listed on the Exchange Effect Indonesia
Period 2017-2019). IJMRA: International Journal of Multidisciplinary Research and Analysis, 06 (01), 280–287. In.
Nyakundi, J. (2021). Financial Planning Practices And Financial Performance of Manufacturing Companies Listed in Nairobi Security Exchange, Kenya. University of Nairobi,
Onyebuchi, A. E. (2023). Capital Market and Manufacturing Sector Capacity Utilization in Nigeria 1990 To 2022. POLAC Economics Review, 3.
Pfeffer, J. (2019). Size and composition of corporate boards of directors: The organization and its environment. In Corporate governance (pp. 53-64): Gower.
Pham, C. D. (2020). The effect of capital structure on financial performance of Vietnamese listing pharmaceutical
enterprises. The Journal of Asian Finance, Economics and Business, 7(9), 329-340.
Poletti‐Hughes, J., & Martinez Garcia, B. (2022). Leverage in family firms: The moderating role of female directors and board quality. International Journal of Finance & Economics, 27(1), 207-223.
Pryshchepa, O. (2021). Disciplining entrenched managers through corporate governance reform: Implications for risk‐taking behavior. Corporate Governance: An International Review, 29(4), 328-351.
Putri, I. G. A. P. T., & Rahyuda, H. (2020). Effect of capital structure and sales growth on firm value with profitability as mediation. International research journal of management, IT and Social Sciences, 7(1), 145-155.
Ramli, N. A., Latan, H., & Solovida, G. T. (2019). Determinants of capital structure and firm financial performance—A PLS-SEM approach: Evidence from Malaysia and Indonesia. The Quarterly Review of Economics and Finance, 71,
148-160.
Rashid Khan, H. u., Khidmat, W. B., Hares, O. A., Muhammad, N., & Saleem, K. (2020). Corporate governance quality, ownership structure, agency costs and firm performance. Evidence from an emerging economy. Journal of Risk and Financial Management, 13(7), 154.
Riofrio, M. I. P., Granizo, G. G. U., Mayorga, M. d. l. Á. H., & Alarcón, C. H. M. (2023). Key Performance Indicators For Business Financial Perspective. Journal of Namibian Studies: History Politics Culture, 34, 3917-3940.
Salmana, M. D. (2020). The Role of Self-financing in Improving the Quality of Services Provided in the Government Health Sector in Iraq. International Journal of Innovation, Creativity and Change, 13(12).
Sari, I. A. G. D. M., & Sedana, I. B. P. (2020). Profitability and liquidity on firm value and capital structure as intervening variable. International research journal of management, IT and Social Sciences, 7(1), 116-127.
Shan, Y. G. (2019). Managerial ownership, board independence and firm performance. Accounting Research Journal, 32(2), 203-220.
Tanko, U. M., Siyanbola, A. A., Bako, P. M., & Dotun, O. V. (2021). Capital structure and firm financial performance: Moderating effect of board financial literacy in Nigerian listed non-financial companies. Journal of Accounting Research, Organization and Economics, 4(1), 48-66.
Tannady, H., Pahlawi, N., Hernawan, M. A., Arta, D. N. C., & Yusuf, S. D. (2023). Role of Stock Performance as an Intervening Variable in a Relationship Between Profitability, Leverage, Growth and Company Value. JEMSI (Jurnal
Ekonomi, Manajemen, dan Akuntansi), 9(2), 220-225.
Tanui, P. J., Omare, D., & Omondi, M. A. (2021). Asset Structure, Corporate Governance, Capital Structure and Financial Performance of Construction and Manufacturing Firms Listed In Kenya.
Thakolwiroj, C., & Sithipolvanichgul, J. (2021). Board characteristics and capital structure: evidence from Thai listed companies. The Journal of Asian Finance, Economics and Business, 8(2), 861-872.
Tikasari, N., & Surjandari, D. A. (2020). The Determinant of Market-Based Performance: Evidence from Manufacturing Companies in Indonesia. Mediterranean Journal of Social Sciences, 11, 20.
Vitolla, F., Raimo, N., & Rubino, M. (2020). Board characteristics and integrated reporting quality: An agency theory perspective. Corporate Social Responsibility and Environmental Management, 27(2), 1152-1163.
Watt, D., Langa, A., & Maclean, E. (2022). Governance and the Role of the Board. In A Director's Guide to Governance in the Boardroom (pp. 1-54): Routledge.
Yıldırım, D., & Çelik, A. K. (2021). Testing the pecking order theory of capital structure: Evidence from Turkey using panel quantile regression approach. Borsa Istanbul Review, 21(4), 317-331.
Article Sidebar
Published
Oct 6, 2024
Article Details
How to Cite
Mitei , A. C., Kirui , D., & Kemboi , I. (2024). Capital Structure and Firm Financial Performance Nexus. How Much Difference Does Board Independence Make? Evidence from Manufacturing, Construction, and Allied Companies Listed at Nairobi Securities Exchange Kenya. Journal of Business, Economics and Management Research Studies, 2(3), 98–116. https://doi.org/10.69897/jobemrs.v2i3.160
Issue
Section
Original Articles
Author Biographies
Agnes Chepkoech Mitei , School of Business and Economics, Department of Accounting and Finance, Moi University, P. O. Box 3900-30100, Kesses, Kenya
School of Business and Economics, Department of Accounting and Finance, Moi University, Kenya
Daniel Kirui , School of Business and Economics, Department of Accounting and Finance, Moi University, P. O. Box 3900-30100, Kesses, Kenya
School of Business and Economics, Department of Accounting and Finance, Moi University, Kenya
Isaac Kemboi , School of Business and Economics, Department of Accounting and Finance, Moi University, P. O. Box 3900-30100, Kesses, Kenya
School of Business and Economics, Department of Accounting and Finance, Moi University, Kenya