| dc.description.abstract | In recent times, interest in listing at the securities exchange has assumed high prepositions in
Kenya. This situation has probably developed as a result of renewed awareness of the several
roles played by the capital market such as; lowering cost of equity hence stimulating investment
and growth by spreading the risks of long terms investment. Therefore, the purpose of this study
was to analyze the effect of listing on firm value of quoted insurance companies at the Nairobi
Securities Exchange. More specifically, the study sought to establish the extent to which listing
affects the various firm value variables namely; profitability, liquidity, gearing and investors
valuation of the firm. This study utilized three main theories i.e. market timing theory, capital
structure irrelevance theory and the pecking order theory. The study adopted a descriptive
research design with the target population being all 6 insurance companies listed at the Kenyan
Bourse. Secondary Data was collected from the NSE and published financial statements from the
companies’ websites. Data collected was analyzed using student t test. The research findings
indicate that there is no significant relationship between listing and firm value hence acceptance
of null hypotheses. The implication of these findings is that listing does not improve the
company’s value. Therefore a fundamental understanding of listing effect on firm value is crucial
for decision makers to undertake rational thinking before undertaking listing. This requires an
appreciation of the economic conditions that can either initiate or truncate a company’s growth;
one that is often complex and unpredictable, but facilitates the life cycle of the firm. This study
therefore recommends for similar studies to be carried out in Kenya so as to analyze the impact
of listing on firm value over a longer post listing time-span. | en_US |
