Influence of Firm Characteristics on the Impact of Disclosure and Transparency in the Performance of Companies Listed in Nairobi Securities Exchange

The performance of companies listed in the Nairobi Securities Exchange (NSE) has come under intense
scrutiny after a general decline in market share prices of a number of firms between the years 2011–2015
due to poor corporate governance practices. This study examined the relationship between disclosure &
transparency and performance of listed companies at NSE with firm’s characteristics as the moderating
variable. The study was anchored on Agency theory and Signaling theory. The study adopted both
descriptive and correlational research designs on all 60 companies listed in Nairobi Securities Exchange
during the period 2011-2015. Primary data was collected from companies CEOs or their representatives
whereas secondary data was obtained from the Capital Markets Authority and NSE. Descriptive statistics
(mean and standard deviation) and inferential statistics (Pearson correlation and multiple regression) were
used to analyze the data. Findings showed a significant relationship between disclosure & transparency
and performance of firms listed at the NSE and that firm’s characteristics had a moderating effect on the
relationship between disclosure and transparency and firm performance. Moderation was supported, since
the calculated p value of the interaction was 0.000<0.05, the null hypothesis was rejected, hence firm’s
characteristics variable has significant moderating effect on relationship between disclosure &
transparency and performance of firms listed at the Nairobi Securities Exchange.