Year: 2026 | Month: September | Volume: 13 | Issue: 9 | Pages: 96-114
DOI: https://doi.org/10.52403/ijrr.20260912
Effect of Financial Structure on Financial Performance of Listed Energy and Petroleum Firms in Kenya
Ruth Cherotich Sang’1, Dr. Robert Simiyu2, Dr. Dickson Sing’oei3
1Masters Student, 2,3Lecturers, Department of Postgraduate Studies
AMECEA Gaba Campus, The Catholic University of Eastern Africa, Nairobi, Kenya.
Corresponding Author: Ruth Cherotich Sang’
ABSTRACT
This study examined the effect of financial structure on financial performance of listed energy and petroleum firms at the Nairobi Securities Exchange, Kenya. The dependent variable was financial performance of listed energy firms, measured by the return on assets ratio. The study analysed the following research objectives; to analyse the effect of equity financing on financial performance of listed energy and petroleum sector firms in Kenya; and to establish the effect of debt financing on financial performance of listed energy and petroleum sector firms in Kenya. The study was anchored on the Pecking order Theory, and Trade-off theory as the main study theories. A correlational research design was adopted by the study while dealing with the research objectives where the scope of the study covered four listed firms as per the Nairobi Securities Exchange records under the energy and petroleum sector firms. Data was obtained from the audited and published financial statements of the listed energy firms, covering the 7-year period running from 2018 to 2024. Data analysis was carried out using the Statistical Package for Social Sciences version 29 and Microsoft Excel spreadsheet in respect to the study objectives. Multiple regression and Pearson’s correlation statistical methods were used for data analysis. The study findings revealed a positive but moderate relationship between equity financing and financial performance (r=0.552, p=0.01; β=0.11524); and debt financing had a positive and significant effect on financial performance (r=0.576, p=0.01; β=0.23217). while firm size had a positive and statistically significant moderating effect on the relationship between the independent variables and financial performance of the listed energy firms as indicated by an increase of 19.21% in the r2 value. The study findings were of great importance to management of listed energy and petroleum sector firms and other non-listed energy and petroleum firms as well as other business entities in relation to financial structure. The results added to the existing knowledge on financial structure and provided scholars and future researchers with necessary literature review for future research.
Keywords: Financial Structure, Financial Performance, Equity Financing, Debt Financing
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