The purpose of this study was to examine exports as a determinant of inflation in Kenya: A disaggregated econometric analysis with specific objectives of establishing the relationship between domestic exports and inflation in Kenya and determining the relationship between re -exports and inflation in Kenya. This was occasioned by inconclusive and incomprehensive analysis on the relationship between exports and inflation given mixed results and failure by scholars to disaggregate total exports into domestic exports and re-exports. Correlation research design was employed using monthly time series obtained from Central Bank of Kenya (CBK) data spanning 132 months from January 2005 to December 2015.Vector Autoregressive (VAR) techniques of cointegration, Granger causality and impulse response analysis were employed. Results indicated a significant positive and negative long run relationship between domestic exports and reexports with inflation in Kenya respectively that were supported by the impulse response analysis. A unidirectional causality running from domestic exports to inflation and re-exports to inflation was also established. The study concluded that domestic exports and re-exports determine inflation in Kenya with domestic exports having greater influence and therefore recommended that the government of Kenya needs to advocate for a trade policy that aims at reducing exports of domestically produced products and increase re-exports. This will ensure that only surplus is exported to reduce shortage of domestically produced commodities hence a reduction in price for the products.
Aim: The aim of this study is to investigate the influence of corona virus disease and other external factors on growth of accommodation and restaurant services (ARS) in Kenya. Study Design: The study employed quantitative research design involving quarterly time series data from quarter 1 of 2014 to quarter 1 of 2020. The data set was obtained from Kenya National Bureau of Statistics (KNBS). Methodology: The study employed unrestricted vector autoregression to investigate the changes in the growth of accommodation and restaurant services. Results: Results indicated that COVID-19, professional, administrative and support services, construction and past ARS growth at 1 to 3 lags influences growth of ARS in Kenya negatively. On the other hand, real estate growth, time trend, tax on products, other services, education, manufacturing, information and communication and past growth in ARS at lag 4 influences growth in ARS sector positively. It was also noted that growth in agriculture and transport and storage do not influence growth of ARS in Kenya. Conclusion: In conclusion, COVID-19, professional, administrative and support services, construction and past ARS growth, real estate growth, time trend, tax on products, other services, education, manufacturing, information and communication are the main determinants for the growth of ARS in Kenya.
<p>The government of Kenya’s broad target for enhancing manufacturing is to increase the manufacturing share of gross domestic product from 8.4% to 15% to create more jobs but the target remains a mirage owing to the poor performance of the manufacturing sector over the years where for instance, sector performance declined to 3.5% in 2019 compared to 4.4% in 2018. Studies globally, regionally and locally have been conducted to establish how macroeconomic variables affect the profitability of companies. However, mixed results have been reported pointing to positive, negative, significant and insignificant effects making it unknown how economic growth, inflation and exchange rates influence the performance of manufacturing firms. The purpose of this study was to establish the influence of Interest rates on the financial performance of listed manufacturing companies in Kenya. The study was guided by; the efficient market hypothesis and arbitrage pricing theory. This study adopted a descriptive correlational research design grounded on panel data spanning 6 years from 2015 to 2020 with a target of 8 listed manufacturing firms. The exchange rate showed a negative influence on performance with coefficients 0.358, 2.764 and -1.532 respectively such that a 1% increase in economic growth and inflation increased performance by 0.358% and 2.764% respectively while a 1% increase in exchange rate decreased performance by 1.532%. The study recommends the formulation of prudent macroeconomic policies including bailouts during pandemics geared towards enhancing the performance of manufacturing firms as envisaged under the Big four agenda and Vision 2030 blueprint.</p><p> </p><p><strong>JEL</strong>: L60; O24; F31</p>
Dynamic capital structure is the way firms make adjustments towards the target capital structure which is proxied by debt equity ratio. There has been variation of debt equity ratio of firms at the Nairobi Security Exchange (NSE) in an effort to achieving targeted leverage that would yield targeted revenues and profits for firms. Despite this, most firms still operate at sub optimal level and experience losses. Studies in this respect have attributed the sub optimal operations to monetary facets such as inflation rate, exchange rate and interest rate. However, the studies have yielded mixed results leaving the effect of monetary facets on the dynamic capital structure unresolved. It is on this basis the study sought to establish effect of the monetary facets on dynamic capital structure of selected commercial banks listed at the NSE. The study was anchored on market timing theory and guided by correlational research design. The target population was eight tier one banks at the NSE. Secondary data spanning ten years from 2010 to 2019 were obtained from commercial banks audited financial statements while data on monetary facets was obtained from Central Bank of Kenya database and audited financial statements of the banks. Panel data methodology was adopted to estimate Random and Fixed Effect Models and the Hausman test used to select the appropriate model. Whereas exchange rate had insignificant positive effect, interest rate had significant positive effect on the dynamic capital structure. Inflation however, had significant negative effect on the same. Therefore, to enhance performance of banks, hedging interest rate and inflation rate risks is necessary.
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