Firm value is dependent on Corporate governance which leads to increased value. High valued firms attract more investors. Towards firm value protection, minimum capital requirements were raised by the Central Bank of Kenya from 250 million to 1 billion shillings on commercial banks to cushion bank shareholders value. Despite the increased oversight and regulatory efforts on corporate governance to protect and enhance firm value, some commercial banks have recorded low firm value. Hence, this study sought to investigate the effect of corporate governance on firm value of commercial banks in Kenya. The study was anchored on Agency Theory. Explanatory research design was adopted. Target population was forty four Kenyan commercial banks, where a census was conducted. Secondary data was collected from published financial statements and bank websites for the period 2009 to 2018. STATA version 13.0 was used for data analysis. Descriptive and inferential statistics specifically panel regression was used in data analysis. The study findings established that there is a statistically significant effect between corporate governance and firm value of commercial banks in Kenya. Therefore, the study concluded that firms with good corporate governance have high firm value. And as such, these calls for the management of the commercial banks improve corporate which will go a long way in improving firm value. There is also need for Central bank of Kenya, Capital Markets Authority and Nairobi Securities Exchange to emphasis on corporate governance to enable achievement of high firm value.
Evans Machero Ochego: Email:firstname.lastname@example.org, Box 64135-00620,Nairobi,Kenya, School of Business, Kenyatta University.
Job Omagwa: Email:email@example.com, School of Business, Kenyatta University
Stephen Muathe: Email:firstname.lastname@example.org, School of Business, Kenyatta University
Evans MacheroOchego Job Omagwa Stephen Muathe "Corporate Governance Strategy and Firm Value in the Context of Commercial Banks in Kenya" Internat Economics and Management Works Vol. 7 Issue 04 PP. 05-07 April 2020
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