EFFECT OF INVESTMENT DIVERSIFICATION ON FINANCIAL PERFORMANCE OF AGRICULTURAL FIRMS LISTED AT NAIROBI SECURITIES EXCHANGE KENYA

Rebecca Nasimiyu Wanyonyi ()

International Journal of Finance and Accounting, 2018, vol. 3, issue 2, 57 - 71

Abstract: The general objective of study was to examine investment diversification effect on the financial performance of agricultural firms listed at NSE. The study employed descriptive research design. The study population consisted of seven listed agricultural firms at NSE. The study employed a census approach because of the small number of agricultural listed firms at the NSE. Secondary panel data was used for a period covering seven years (2011-2017).R squared (coefficient of determination) was 52.80%. which showed that investment diversification explain 52.80% of the dependent variable variations that is financial performance The study also found that horizontal diversification, concentric diversification, conglomerate diversification and vertical diversification had a positive relationship with financial performance. The study suggested that firms should look for better avenues to mitigate the risk of doing business or their operations. Through diversification, a firm is not dependent on a limited number of products, locations, or markets in order to remain competitive and survive in the dynamic economic environment.

Keywords: investment diversification; agricultural sector; horizontal diversification; concentric diversification; conglomerate diversification; vertical diversification; financial performance (search for similar items in EconPapers)
Date: 2018
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