PAN-AFRICAN JOURNAL OF BUSINESS MANAGEMENT, Apr 16, 2018
This paper investigates the intervening influence of economic growth on the relationship between ... more This paper investigates the intervening influence of economic growth on the relationship between fiscal policy stance and public expenditure in Kenya from 1964 to 2015 using a Vector Error Correction Model. The results indicate that economic growth has an intervening influence on the relationship between fiscal policy stance and public expenditure in Kenya. The findings further show that fiscal policy, economic growth and public expenditure are cointegrated using the Johansen test and the bound test but there is no short-run causality between the variables as indicated by the Wald test statistics. The findings suggest that economic growth explains the extent to which fiscal policy stance affects the level of public expenditure in Kenya even though fiscal policy stance has a negative relationship with public expenditure.
The United States of America subprime mortgage market precipitated the occurrence of the 2008 glo... more The United States of America subprime mortgage market precipitated the occurrence of the 2008 global economic crisis that has made financial disruptions the world over. Therefore there has been the need to evaluate the extent to which this crisis affected economies globally. Hence, the effect of the 2008 global economic crisis on public expenditure was reviewed. The paper concludes that economies whose public expenditures were significantly affected by the crisis were those closely integrated to the US financial markets, those with imprudent macroeconomic measures at the pre-crisis period and those with a high level of export dependence. Also the interrelation between macroeconomic factors and public expenditure as influenced by economic policy indicates that the crisis caused the macroeconomic factors to deteriorate. Hence this led to governments adopting economic policy measures that could curtail the crisis effect on public expenditure. JEL classification numbers: G01, E62
Private equity investments in the recent past have been very strong and using leverage to make de... more Private equity investments in the recent past have been very strong and using leverage to make deals has accelerated sharply as well in both developed and emerging economies. Therefore, private equity is a suitable alternative in financing organizations at their various stages of growth. Hence, this study uses an exploratory approach to establish the extent to which private equity investments are adopted by firms, the forms of private equity mostly applicable and the exit strategies of private equity funds. Primary data was collected using a questionnaire as the main primary data collection tool. The findings show that banks and development financial institutions are the top investors in private equity funds and large corporate companies are the top clients in adoption of private equity followed by SMEs while listed companies are the lowest adopters of private equity. Key words: Private equity, venture capital, private equity investments, exit strategies. 1.
There has been a debate on whether private equity affects economic growth of a region or the reve... more There has been a debate on whether private equity affects economic growth of a region or the reverse effect. Therefore there has been need to evaluate the interrelationship between private equity and economic growth across the globe while considering the influence of the financial environment. Hence, this paper analyses these interrelationships using a theoretical approach. The key findings are that private equity tends to increase when there is economic growth in an economy as underpinned by the economic growth models which contend that for economic growth to be sustainable there should be continuous advancement in technical knowledge mainly in the form of new products, processes and markets. Furthermore, a well developed legal and regulatory framework would lead to increased financial activities in a country hence facilitating exits which would result to a more favorable legal environment that induces venture capitalists and PE funds to invest more often in the home country.
Advances in Management and Applied Economics, 2014
The United States of America subprime mortgage market precipitated the occurrence of the 2008 glo... more The United States of America subprime mortgage market precipitated the occurrence of the 2008 global economic crisis that has made financial disruptions the world over. Therefore there has been the need to evaluate the extent to which this crisis affected economies globally. Hence, the effect of the 2008 global economic crisis on public expenditure was reviewed. The paper concludes that economies whose public expenditures were significantly affected by the crisis were those closely integrated to the US financial markets, those with imprudent macroeconomic measures at the pre-crisis period and those with a high level of export dependence. Also the interrelation between macroeconomic factors and public expenditure as influenced by economic policy indicates that the crisis caused the macroeconomic factors to deteriorate. Hence this led to governments adopting economic policy measures that could curtail the crisis effect on public expenditure.
Security trading is the main function of an investment bank. It is therefore the process through ... more Security trading is the main function of an investment bank. It is therefore the process through which financial asset of any kind is traded. This paper is aimed at analyzing the various factors affecting security trading in investments banks in Kenya. The specific objectives which affect security trading in the investment banks include; legal and the regulatory framework, insider trading, taxation of investment income and the public knowhow on security trading. In summary, the researcher found out that compliance to CMA and having proper corporate governance structures are ways through which an investment bank is said to function in accordance to the laid down legal and regulatory framework. It was also found out that insider trading and taxation greatly affects the volume of securities to be traded in an investment bank. Poor literacy level, information inadequacy and lack of accessing the so needed information are some of the factors that affect public knowledge on security tradi...
The purpose of this paper is to examine the effect of fiscal policy stance on public expenditure ... more The purpose of this paper is to examine the effect of fiscal policy stance on public expenditure in Kenya while underpinned by the theory of fiscal policy, Peacock-Wiseman hypothesis, and Wagner's Law of increasing state activities. The methodology used was time series modelling involving the following steps; firstly, employing descriptive statistic analysis. Secondly, diagnostic testing involving stationarity test, cointegration test, and Granger causality tests. Thirdly, time series modelling was done using VECM and VAR models. Finally, post-diagnostic tests involving serial correlation test and heteroscedasticity test. The research indicates a negative relationship between fiscal policy stance (a budget deficit) and public expenditure, but fiscal stance through tax has a positive relationship with public expenditure. Fiscal policy stance and public expenditure are cointegrated, as shown by the Johansen cointegration test. Still, there is no short run causality between them as indicated by the Wald test statistics. The study is limited to fiscal policy stance and public expenditure in Kenya while considering selected macroeconomic factors. The research findings are vital to policymakers. Fiscal policy stance indirectly affects public expenditure through economic growth and macroeconomic factors. This implies that fiscal policy stance does not substantially affect public expenditure as supported by the theory of fiscal policy that contends that policymakers could have a lower incentive to pursue public interests compared to their interests.
The revolution of information technology has transformed the financial services industry. Despite... more The revolution of information technology has transformed the financial services industry. Despite the undeniable importance of financial innovation in improving service delivery, there is inadequate understanding about the drivers of adoption of e-banking systems. The study established the influence of organizational capability, perceived technological risk, perceived usefulness, and perceived ease of use on the adoption of e-banking in Kenya. The study is grounded on the Technology Acceptance Model (TAM) and Technology-Organization-Environment (TOE) framework. The findings show that the presence of electronic systems, databases, and applications; effective management and oversight, and financial capacity are prerequisite to adoption and use of e-banking services. The main risks perceived by respondents were the effect of incorrect entries, time taken to learn how to use the system, and system outages that may affect access to accounts. E-banking was also perceived to be faster, eas...
The purpose of this paper is to examine the effect of fiscal policy stance on public expenditure ... more The purpose of this paper is to examine the effect of fiscal policy stance on public expenditure in Kenya while underpinned by the; Theory of fiscal policy, Peacock-Wiseman hypothesis and Wagner’s Law of increasing state activities. The methodology used was time series modelling involving the following steps; firstly, employing descriptive statistic analysis. Secondly, diagnostic testing involving stationarity test, cointegration test and Granger causality tests. Thirdly, time series modelling was done using VECM and VAR models. Finally, post-diagnostic tests involving serial correlation test and heteroscedasticity test. The research indicates that there is a negative relationship between fiscal policy stance (budget deficit) and public expenditure but fiscal stance through tax has a positive relationship with public expenditure. Fiscal policy stance and public expenditure are cointegrated as shown by the Johansen cointegration test but there is no short run causality between them a...
The real estate industry has increasingly become a key pillar industry in Kenya. However, in rece... more The real estate industry has increasingly become a key pillar industry in Kenya. However, in recent years the real estate prices have risen rapidly with home prices increasing sharply in comparison to prices of goods and services in other industries. At the same time, housing demand has posed an economic and social challenge arousing continental and universal concerns. The main objective of this paper was to analyse the effects of infrastructure development on real estate values in Meru County, Kenya. The findings indicate that the factors that lead to high prices in the real estate sector include improved transport networks, improved social amenities, industries, expanded educational institutions and commercial centers. Key words: Real Estate Values, Infrastructure Development, Property
The objective of this study was to analyze factors affecting uptake of agency banking services am... more The objective of this study was to analyze factors affecting uptake of agency banking services among customers in rural Kenya. Specifically, the study sought; to examine the effect of fraud on uptake of agency banking services among customers in Kenya; to determine the extent to which skills of agents affect uptake of agency banking services among customers in Kenya; To establish the effect of location on uptake of agency banking services among customers in Kenya and to find out how confidentiality affect agency banking services uptake among rural customers in Kenya. A multivariate regression model was applied to determine the relative importance of each of the four variables. The findings indicated that bank agent skills, location and confidentiality were found to be statistically significant in explaining uptake of agency banking services. Banks should create awareness to the public that the bank agent's premises adheres to standard security measures and should also hire security services from security firms to transport cash to and from the agents where necessary. Banks should also train the agency banking agents on how to detect fake money and fraud. The study revealed that agents' skills affected uptake of agency banking services by rural community in Narok County. The study recommends banks to offer training to agents before they start providing specific services on behalf of the banks to improve their customer handling skills and increase the uptake of the agency banking services.
Private equity investments in the recent past have been very strong and using leverage to make de... more Private equity investments in the recent past have been very strong and using leverage to make deals has accelerated sharply as well in both developed and emerging economies. Therefore, private equity is a suitable alternative in financing organizations at their various stages of growth. Hence, this study uses an exploratory approach to establish the extent to which private equity investments are adopted by firms, the forms of private equity mostly applicable and the exit strategies of private equity funds. Primary data was collected using a questionnaire as the main primary data collection tool. The findings show that banks and development financial institutions are the top investors in private equity funds and large corporate companies are the top clients in adoption of private equity followed by SMEs while listed companies are the lowest adopters of private equity.
Financial institutions hugely contribute to Rwandan economic development. However, different stud... more Financial institutions hugely contribute to Rwandan economic development. However, different studies showed that they expose to risks that limit them from attaining their objectives. The banking sector's liquidity, efficiency, and profitability in Rwanda have weakened in the past four years-2015 to 2018 and its performance indicators collapsed. This study intended to examine the effect of the CAMEL rating model on the financial performance of commercial banks in Rwanda for the period ranging from 2014 to 2018. It was underpinned by four theories namely; cash management theory, agency theory, liability management theory, and market power theory. This paper covered11 commercial banks operating in Rwanda and adopted secondary data published by the Central Bank of Rwanda and the official websites of mentioned the 11 banks.Descriptive research design and panel regression were employed to evaluate the correlation between the predictor and outcome variables. The findings concluded that capital adequacy and asset quality are positively correlated to determine the value of financial performance. Liquidity management, management efficiency, and earnings management have a negative correlation. However, capital adequacy, asset quality, management efficiency are statistically significant to predict the ROA at a 5% level. This paper recommends that both the banks' management and financial regulatory body should work together to formulate policies that would help improving banking sector efficiency without violating the right of their clients. When it comes to the evaluation of financial institutions, all the CAMEL model factors should be considered.
PAN-AFRICAN JOURNAL OF BUSINESS MANAGEMENT, Apr 16, 2018
This paper investigates the intervening influence of economic growth on the relationship between ... more This paper investigates the intervening influence of economic growth on the relationship between fiscal policy stance and public expenditure in Kenya from 1964 to 2015 using a Vector Error Correction Model. The results indicate that economic growth has an intervening influence on the relationship between fiscal policy stance and public expenditure in Kenya. The findings further show that fiscal policy, economic growth and public expenditure are cointegrated using the Johansen test and the bound test but there is no short-run causality between the variables as indicated by the Wald test statistics. The findings suggest that economic growth explains the extent to which fiscal policy stance affects the level of public expenditure in Kenya even though fiscal policy stance has a negative relationship with public expenditure.
The United States of America subprime mortgage market precipitated the occurrence of the 2008 glo... more The United States of America subprime mortgage market precipitated the occurrence of the 2008 global economic crisis that has made financial disruptions the world over. Therefore there has been the need to evaluate the extent to which this crisis affected economies globally. Hence, the effect of the 2008 global economic crisis on public expenditure was reviewed. The paper concludes that economies whose public expenditures were significantly affected by the crisis were those closely integrated to the US financial markets, those with imprudent macroeconomic measures at the pre-crisis period and those with a high level of export dependence. Also the interrelation between macroeconomic factors and public expenditure as influenced by economic policy indicates that the crisis caused the macroeconomic factors to deteriorate. Hence this led to governments adopting economic policy measures that could curtail the crisis effect on public expenditure. JEL classification numbers: G01, E62
Private equity investments in the recent past have been very strong and using leverage to make de... more Private equity investments in the recent past have been very strong and using leverage to make deals has accelerated sharply as well in both developed and emerging economies. Therefore, private equity is a suitable alternative in financing organizations at their various stages of growth. Hence, this study uses an exploratory approach to establish the extent to which private equity investments are adopted by firms, the forms of private equity mostly applicable and the exit strategies of private equity funds. Primary data was collected using a questionnaire as the main primary data collection tool. The findings show that banks and development financial institutions are the top investors in private equity funds and large corporate companies are the top clients in adoption of private equity followed by SMEs while listed companies are the lowest adopters of private equity. Key words: Private equity, venture capital, private equity investments, exit strategies. 1.
There has been a debate on whether private equity affects economic growth of a region or the reve... more There has been a debate on whether private equity affects economic growth of a region or the reverse effect. Therefore there has been need to evaluate the interrelationship between private equity and economic growth across the globe while considering the influence of the financial environment. Hence, this paper analyses these interrelationships using a theoretical approach. The key findings are that private equity tends to increase when there is economic growth in an economy as underpinned by the economic growth models which contend that for economic growth to be sustainable there should be continuous advancement in technical knowledge mainly in the form of new products, processes and markets. Furthermore, a well developed legal and regulatory framework would lead to increased financial activities in a country hence facilitating exits which would result to a more favorable legal environment that induces venture capitalists and PE funds to invest more often in the home country.
Advances in Management and Applied Economics, 2014
The United States of America subprime mortgage market precipitated the occurrence of the 2008 glo... more The United States of America subprime mortgage market precipitated the occurrence of the 2008 global economic crisis that has made financial disruptions the world over. Therefore there has been the need to evaluate the extent to which this crisis affected economies globally. Hence, the effect of the 2008 global economic crisis on public expenditure was reviewed. The paper concludes that economies whose public expenditures were significantly affected by the crisis were those closely integrated to the US financial markets, those with imprudent macroeconomic measures at the pre-crisis period and those with a high level of export dependence. Also the interrelation between macroeconomic factors and public expenditure as influenced by economic policy indicates that the crisis caused the macroeconomic factors to deteriorate. Hence this led to governments adopting economic policy measures that could curtail the crisis effect on public expenditure.
Security trading is the main function of an investment bank. It is therefore the process through ... more Security trading is the main function of an investment bank. It is therefore the process through which financial asset of any kind is traded. This paper is aimed at analyzing the various factors affecting security trading in investments banks in Kenya. The specific objectives which affect security trading in the investment banks include; legal and the regulatory framework, insider trading, taxation of investment income and the public knowhow on security trading. In summary, the researcher found out that compliance to CMA and having proper corporate governance structures are ways through which an investment bank is said to function in accordance to the laid down legal and regulatory framework. It was also found out that insider trading and taxation greatly affects the volume of securities to be traded in an investment bank. Poor literacy level, information inadequacy and lack of accessing the so needed information are some of the factors that affect public knowledge on security tradi...
The purpose of this paper is to examine the effect of fiscal policy stance on public expenditure ... more The purpose of this paper is to examine the effect of fiscal policy stance on public expenditure in Kenya while underpinned by the theory of fiscal policy, Peacock-Wiseman hypothesis, and Wagner's Law of increasing state activities. The methodology used was time series modelling involving the following steps; firstly, employing descriptive statistic analysis. Secondly, diagnostic testing involving stationarity test, cointegration test, and Granger causality tests. Thirdly, time series modelling was done using VECM and VAR models. Finally, post-diagnostic tests involving serial correlation test and heteroscedasticity test. The research indicates a negative relationship between fiscal policy stance (a budget deficit) and public expenditure, but fiscal stance through tax has a positive relationship with public expenditure. Fiscal policy stance and public expenditure are cointegrated, as shown by the Johansen cointegration test. Still, there is no short run causality between them as indicated by the Wald test statistics. The study is limited to fiscal policy stance and public expenditure in Kenya while considering selected macroeconomic factors. The research findings are vital to policymakers. Fiscal policy stance indirectly affects public expenditure through economic growth and macroeconomic factors. This implies that fiscal policy stance does not substantially affect public expenditure as supported by the theory of fiscal policy that contends that policymakers could have a lower incentive to pursue public interests compared to their interests.
The revolution of information technology has transformed the financial services industry. Despite... more The revolution of information technology has transformed the financial services industry. Despite the undeniable importance of financial innovation in improving service delivery, there is inadequate understanding about the drivers of adoption of e-banking systems. The study established the influence of organizational capability, perceived technological risk, perceived usefulness, and perceived ease of use on the adoption of e-banking in Kenya. The study is grounded on the Technology Acceptance Model (TAM) and Technology-Organization-Environment (TOE) framework. The findings show that the presence of electronic systems, databases, and applications; effective management and oversight, and financial capacity are prerequisite to adoption and use of e-banking services. The main risks perceived by respondents were the effect of incorrect entries, time taken to learn how to use the system, and system outages that may affect access to accounts. E-banking was also perceived to be faster, eas...
The purpose of this paper is to examine the effect of fiscal policy stance on public expenditure ... more The purpose of this paper is to examine the effect of fiscal policy stance on public expenditure in Kenya while underpinned by the; Theory of fiscal policy, Peacock-Wiseman hypothesis and Wagner’s Law of increasing state activities. The methodology used was time series modelling involving the following steps; firstly, employing descriptive statistic analysis. Secondly, diagnostic testing involving stationarity test, cointegration test and Granger causality tests. Thirdly, time series modelling was done using VECM and VAR models. Finally, post-diagnostic tests involving serial correlation test and heteroscedasticity test. The research indicates that there is a negative relationship between fiscal policy stance (budget deficit) and public expenditure but fiscal stance through tax has a positive relationship with public expenditure. Fiscal policy stance and public expenditure are cointegrated as shown by the Johansen cointegration test but there is no short run causality between them a...
The real estate industry has increasingly become a key pillar industry in Kenya. However, in rece... more The real estate industry has increasingly become a key pillar industry in Kenya. However, in recent years the real estate prices have risen rapidly with home prices increasing sharply in comparison to prices of goods and services in other industries. At the same time, housing demand has posed an economic and social challenge arousing continental and universal concerns. The main objective of this paper was to analyse the effects of infrastructure development on real estate values in Meru County, Kenya. The findings indicate that the factors that lead to high prices in the real estate sector include improved transport networks, improved social amenities, industries, expanded educational institutions and commercial centers. Key words: Real Estate Values, Infrastructure Development, Property
The objective of this study was to analyze factors affecting uptake of agency banking services am... more The objective of this study was to analyze factors affecting uptake of agency banking services among customers in rural Kenya. Specifically, the study sought; to examine the effect of fraud on uptake of agency banking services among customers in Kenya; to determine the extent to which skills of agents affect uptake of agency banking services among customers in Kenya; To establish the effect of location on uptake of agency banking services among customers in Kenya and to find out how confidentiality affect agency banking services uptake among rural customers in Kenya. A multivariate regression model was applied to determine the relative importance of each of the four variables. The findings indicated that bank agent skills, location and confidentiality were found to be statistically significant in explaining uptake of agency banking services. Banks should create awareness to the public that the bank agent's premises adheres to standard security measures and should also hire security services from security firms to transport cash to and from the agents where necessary. Banks should also train the agency banking agents on how to detect fake money and fraud. The study revealed that agents' skills affected uptake of agency banking services by rural community in Narok County. The study recommends banks to offer training to agents before they start providing specific services on behalf of the banks to improve their customer handling skills and increase the uptake of the agency banking services.
Private equity investments in the recent past have been very strong and using leverage to make de... more Private equity investments in the recent past have been very strong and using leverage to make deals has accelerated sharply as well in both developed and emerging economies. Therefore, private equity is a suitable alternative in financing organizations at their various stages of growth. Hence, this study uses an exploratory approach to establish the extent to which private equity investments are adopted by firms, the forms of private equity mostly applicable and the exit strategies of private equity funds. Primary data was collected using a questionnaire as the main primary data collection tool. The findings show that banks and development financial institutions are the top investors in private equity funds and large corporate companies are the top clients in adoption of private equity followed by SMEs while listed companies are the lowest adopters of private equity.
Financial institutions hugely contribute to Rwandan economic development. However, different stud... more Financial institutions hugely contribute to Rwandan economic development. However, different studies showed that they expose to risks that limit them from attaining their objectives. The banking sector's liquidity, efficiency, and profitability in Rwanda have weakened in the past four years-2015 to 2018 and its performance indicators collapsed. This study intended to examine the effect of the CAMEL rating model on the financial performance of commercial banks in Rwanda for the period ranging from 2014 to 2018. It was underpinned by four theories namely; cash management theory, agency theory, liability management theory, and market power theory. This paper covered11 commercial banks operating in Rwanda and adopted secondary data published by the Central Bank of Rwanda and the official websites of mentioned the 11 banks.Descriptive research design and panel regression were employed to evaluate the correlation between the predictor and outcome variables. The findings concluded that capital adequacy and asset quality are positively correlated to determine the value of financial performance. Liquidity management, management efficiency, and earnings management have a negative correlation. However, capital adequacy, asset quality, management efficiency are statistically significant to predict the ROA at a 5% level. This paper recommends that both the banks' management and financial regulatory body should work together to formulate policies that would help improving banking sector efficiency without violating the right of their clients. When it comes to the evaluation of financial institutions, all the CAMEL model factors should be considered.
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Papers by James Gatauwa