Determinants of Corporate Capital Structure among Private Manufacturing Firms in Kenya: A Survey of Food and Beverage Manufacturing Firms

Abstract

Abstract

Effect Of Gross Domestic Product, Liquidity, Size, Growth, Capital Adequacy Ratio, And Inflation On Financial Performance

“…The company's growth also affects the company's financial performance. This concurs with Gul et al (2012), Shieh et al (2014), Kariuki and Kamau (2014) and Prabansari & Kusuma (2005) in his research stating that the company's growth has a significant positive impact on financial performance. The cause of this is due to the higher growth of the company.…”

Determinant of the financial structure of manufacturing firms in a developing economy: A study of selected listed manufacturing firms in Nigeria

“…unlike small firms which have lower leverage ratio and may be liquidated when they suffer any little financial distress, all things being equal. Empirical studies in support of this views are Ezeoha (2006), Akingunola and Oyetayo (2014), Uremadu (2009), Kariuki and Kamau (2014), Akinyomi and Olagunju (2013), Michael and Adefemi (2015) and Isola (2012).…”

“…However, there are sets of empirical studies in support of our new findings. See for instance: Kariuki and Kamau (2014), Serghiescu and Vaidean (2014), Ogbulu andEmeni (2012), Booth, Aivazian, Demirguc-Kant, Maksimovic (2001), Serghiescu and Vaidean (2014). Again, profitability, though has no significant value as shown by the chosen level of significance and the probability value (0.05 > 0.386), it also contradicts the apriori expectation of the study which hold that firms' with increased profit, all things being equal, will experience a corresponding increase in the financial structure.…”

“…The scholars who pg. 253 made empirical contributions to the debate are Wakeel and Lateef (2015), Qadar, Anjum, Shahid and Sonia (2015), Kpodar and Singh (2011), Akinyomi andOlagunju (2013), Brigham andMichael (2012), Afza and Hussain (2011), Byoun (2007cited in Lim (2012, Kariuki and Kamau (2014), Uremadu and Efobi (2012), Chandrasekharan (2012), Khrawish and Khraiwesh (2010) among others. Yet, the argument is endless as Michael (2012) in his study, capital structure determinants of quoted firms in Nigeria and lessons for corporate financing decisions used regression analysis and the result revealed that the components of capital mix is positively determined by cost of equity, existence of debt tax shield, convenant conditions in debt agreement, firm dividend policy, competitors capital mix and profitability while it is negative by the cost of debt, parent company influence and fear of financial failure, call for new and financially unsuccessful firms to reduce debt/equity ratios when there exists a likelihood of increased financial distress and high cost of debt and increase it when cost of equity, profitability and benefit from tax shield is high assuring trade-off between costs and net tax advantage of additional leverage and costs associated with increased likelihood of financial distress and reduced marketability of corporate debt that would result from additional leverage on the other hand.…”

The Effects of Leverage, Firm Size, Cash Flow Volatility, and Tax Avoidance on Cash Holding in the 2020-2021 Pandemic Period

“…This theory can regulate the company's internal finances which have several priorities on company funding presented by Myres and Majluf (1984). First priority When retained earnings are insufficient to fund new investments, they use cash holdings and issue new debt or securities (Kariuki et al, 2015). Companies that do not target the optimal level of cash and cash are a buffer between retained earnings and investment needs (Guizani, 2017).…”