The Effects of Ownership and Corporate Governance Reforms on Efficiency of Privatized Companies in Kenya

Esther Wanjugu Gitundu, Sifunjo E. Kisaka, Symon Kibet Kiprop and Lawrence Kangogo Kibet
Additional contact information
Esther Wanjugu Gitundu: Division of Research and Extension, Egerton University, P.O. Box 536-20115, Egerton, Kenya
Sifunjo E. Kisaka: Department of Finance and Accounting, University of Nairobi, P.O. Box 30197-00100, Nairobi, Kenya
Symon Kibet Kiprop: Department of Economics, Egerton University P.O. Box, 536-20115, Egerton, Kenya
Lawrence Kangogo Kibet: Department of Economics, Egerton University P.O. Box, 536-20115, Egerton, Kenya

International Journal of Economics and Financial Issues, 2016, vol. 6, issue 1, 323-331

Abstract: 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 (FE) 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; State Owned Enterprises; Efficiency (search for similar items in EconPapers)
JEL-codes: G32 H21 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.econjournals.com/index.php/ijefi/article/download/1842/pdf (application/pdf)
http://www.econjournals.com/index.php/ijefi/article/view/1842/pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2016-01-42

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().