Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257718 
Year of Publication: 
2020
Citation: 
[Journal:] International Journal of Financial Studies [ISSN:] 2227-7072 [Volume:] 8 [Issue:] 3 [Article No.:] 51 [Publisher:] MDPI [Place:] Basel [Year:] 2020 [Pages:] 1-15
Publisher: 
MDPI, Basel
Abstract: 
In Kenya, the last few years has seen the performance of companies listed under the commercial and services segment on the Nairobi Securities Exchange (NSE), experience mixed fortunes. The study sought to assess the implications of financial risk on the performance of these companies. The study applied explanatory research design. The target population were the 14 companies listed under this segment of NSE. Secondary panel data contained in published annual reports for the period 2013-2017 was collected. Panel regression model was applied with the random effect model being used based on the Hausman specification test. Findings showed that credit risk had an insignificant positive effect on return on equity (ROE) while liquidity risk had a significantly negative effect on ROE and operational risk had a positive insignificant effect on ROE. The positive coefficients from the data analysis indicated that commercial and service companies at NSE were able to take in more credit to boost performance of these companies however the negative coefficients shows that within the period of study these companies experienced high liquidity problems in that the current liabilities exceeded the current assets. Thus, concluding that these companies were unable to pay all their obligation when they were due.
Subjects: 
financial performance
financial risk
commercial and services companies
Nairobi Securities Exchange
JEL: 
C03
G02
L02
O05
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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