The Effects of Ownership and Corporate Governance Reforms on Efficiency of Privatized Companies in Kenya
This study investigated the effects of ownership and corporate governance reforms on efficiency of privatized companies in Kenya for the period 2007-2013. Data was extracted from financial reports. A unit root test examined stationarity of data. A fixed effects regression model with a robust standa...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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EconJournals
2016-01-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://econjournals.com/index.php/ijefi/article/view/1842 |
| _version_ | 1797918164961460224 |
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| author | Esther Wanjugu Gitundu Sifunjo E. Kisaka Symon Kibet Kiprop Lawrence Kangogo Kibet |
| author_facet | Esther Wanjugu Gitundu Sifunjo E. Kisaka Symon Kibet Kiprop Lawrence Kangogo Kibet |
| author_sort | Esther Wanjugu Gitundu |
| collection | DOAJ |
| description |
This study investigated the effects of ownership and corporate governance reforms on efficiency of privatized companies in Kenya for the period 2007-2013. Data was extracted from financial reports. A unit root test examined stationarity of data. A fixed effects regression model with a robust standard error option was used to control for firm specific effects which could bias results. The results indicate government ownership has a negative effect on cost and technical efficiency. Local institutional investors influence technical efficiency positively. Large individual shareholders have a positive influence on cost efficiency while dispersed ownership influence cost efficiency negatively. Both non-executive and women directors influence cost efficiency positively. This study recommends further reduction of state and dispersed ownership to pass more ownership and control to institutional investors. Diversity in corporate boards should be enhanced to enable firms to attract managerial and technical expertise from the non -executive and women directors.
Keywords: Privatization; SOEs; Efficiency
JEL Classifications: G32, H21
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| first_indexed | 2024-04-10T13:26:16Z |
| format | Article |
| id | doaj.art-d4a5dd6776234fcbb8d2247daee51474 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T13:26:16Z |
| publishDate | 2016-01-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-d4a5dd6776234fcbb8d2247daee514742023-02-15T16:11:52ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382016-01-0161The Effects of Ownership and Corporate Governance Reforms on Efficiency of Privatized Companies in KenyaEsther Wanjugu Gitundu0Sifunjo E. KisakaSymon Kibet KipropLawrence Kangogo KibetEgerton University This study investigated the effects of ownership and corporate governance reforms on efficiency of privatized companies in Kenya for the period 2007-2013. Data was extracted from financial reports. A unit root test examined stationarity of data. A fixed effects regression model with a robust standard error option was used to control for firm specific effects which could bias results. The results indicate government ownership has a negative effect on cost and technical efficiency. Local institutional investors influence technical efficiency positively. Large individual shareholders have a positive influence on cost efficiency while dispersed ownership influence cost efficiency negatively. Both non-executive and women directors influence cost efficiency positively. This study recommends further reduction of state and dispersed ownership to pass more ownership and control to institutional investors. Diversity in corporate boards should be enhanced to enable firms to attract managerial and technical expertise from the non -executive and women directors. Keywords: Privatization; SOEs; Efficiency JEL Classifications: G32, H21 https://econjournals.com/index.php/ijefi/article/view/1842 |
| spellingShingle | Esther Wanjugu Gitundu Sifunjo E. Kisaka Symon Kibet Kiprop Lawrence Kangogo Kibet The Effects of Ownership and Corporate Governance Reforms on Efficiency of Privatized Companies in Kenya International Journal of Economics and Financial Issues |
| title | The Effects of Ownership and Corporate Governance Reforms on Efficiency of Privatized Companies in Kenya |
| title_full | The Effects of Ownership and Corporate Governance Reforms on Efficiency of Privatized Companies in Kenya |
| title_fullStr | The Effects of Ownership and Corporate Governance Reforms on Efficiency of Privatized Companies in Kenya |
| title_full_unstemmed | The Effects of Ownership and Corporate Governance Reforms on Efficiency of Privatized Companies in Kenya |
| title_short | The Effects of Ownership and Corporate Governance Reforms on Efficiency of Privatized Companies in Kenya |
| title_sort | effects of ownership and corporate governance reforms on efficiency of privatized companies in kenya |
| url | https://econjournals.com/index.php/ijefi/article/view/1842 |
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