Abstract: Capital structure decision is a vital one since the profitability of an enterprise is directly affected by such board decision. The existence of a well-developed board diversity assist in the effectiveness of debt. It is therefore important to examine how board diversity affects capital structure. However, in developing economies including Kenya there is scanty of literature on relationship between board diversity and capital structure. The main aim of the study was be to determine the effect of Board Diversity on Capital Structure among Listed firms in Nairobi Stock Exchange, Kenya. To establish effect of age diversity of board of directors on firm’s capital structure, effect of gender diversity of board of directors on firm’s capital structure, effect of ethnic diversity of board of directors on firm’s capital structure and national diversity of board of directors on firm’s capital structure. The study was informed by Pecking Order Theory and Agency Cost Theory. This study will adopt explanatory design. The study sampled all firms that have been listed on the Nairobi Stock Exchange (NSE) for eight-year period, 2004–2012. Thirty four firms qualified to be included in the study sample. The sample was selected from the firm which has been listed consistently for 8 years. This study utilized secondary data. Documentary guide used to collect data. Data was analysed using descriptive statistical method. In additional, multiple regression and correlation will also be used. The findings were that gender and age had significant and positive effect on capital structure whereas ethnicity and national had negative relationship with capital structure.
Keywords: Capital Structure, Board Diversity, Listed firms, stock exchange, Age Ethnicity, Gender, National Diversity.
Title: Effect of Board Diversity on Capital Structure among Listed Firms in Nairobi Stock Exchange, Kenya
Author: Emmanuel LochorEmoni, Dr. Willy Muturi, Mr. Robert Wamalwa Wandera
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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