Research Article
Sustainability Reporting, Firm Size and Financial Performance: Evidence from Listed Firms in Nairobi Security Exchange, Kenya
Ruth Magara*
Issue:
Volume 11, Issue 2, June 2026
Pages:
89-104
Received:
8 January 2026
Accepted:
24 March 2026
Published:
25 April 2026
Abstract: This study empirically investigates how environmental, social, and governance disclosures influence firm financial performance, and whether firm size acts as a mediating channel through which ESG reporting affects performance among listed firms in the Nairobi Security Exchange. The analysis applies a path (mediation) model that decomposes ESG effects into direct, indirect (via firm size), and total effects. Firm size is modeled as an intermediate outcome affected by each ESG disclosure pillar, while firm performance is modeled as the final outcome influenced by both ESG disclosures and firm size. The results show that ESG dimensions relate differently to firm size: environmental disclosure and governance disclosure have negative and statistically significant effects on firm size, while social disclosure has a positive and highly significant effect on firm size. Firm size, in turn, has a negative and significant effect on firm performance, implying that larger scale is associated with lower performance in this specification. Regarding direct effects on performance, environmental disclosure is negative and significant, social disclosure is insignificant, and governance disclosure is positive and significant. The mediation results indicate that environmental and governance disclosures generate positive indirect effects on performance through their association with smaller firm size, while social disclosure produces a negative indirect effect by increasing firm size. In total effects, only governance disclosure remains positive and statistically significant, while environmental and social total effects are statistically insignificant. Practitioners should prioritize strengthening governance practices and disclosures, while managing environmental and social initiatives with efficiency-focused implementation to avoid short-run performance and scale-related cost burdens. Policymakers should improve ESG disclosure guidance and comparability especially for environmental and social reporting while incentivizing credible governance standards that reinforce accountability and performance.
Abstract: This study empirically investigates how environmental, social, and governance disclosures influence firm financial performance, and whether firm size acts as a mediating channel through which ESG reporting affects performance among listed firms in the Nairobi Security Exchange. The analysis applies a path (mediation) model that decomposes ESG effec...
Show More
Research Article
Influence of Political Uncertainty on Investor Confidence in the Nigerian Stock Market
Issue:
Volume 11, Issue 2, June 2026
Pages:
105-115
Received:
20 January 2026
Accepted:
12 February 2026
Published:
4 June 2026
DOI:
10.11648/j.ijafrm.20261102.12
Downloads:
Views:
Abstract: Political uncertainty has become a significant factor affecting investment decisions and market performance in emerging economies. This study empirically investigates the influence of political uncertainty on investor confidence in the Nigerian Stock Market, focusing on the specific dimensions of electoral uncertainty, policy instability, governance quality, and institutional credibility. Drawing on the Efficient Market Hypothesis, Behavioral Finance Theory, and Institutional Theory, the research posits that these political uncertainty dimensions significantly impact investor confidence. A survey research design was employed, collecting data from 312 investors, fund managers, and financial analysts operating in the Nigerian capital market. Data were analyzed using descriptive statistics, Pearson Product-Moment Correlation, and Multiple Regression Analysis. The findings reveal that all four independent variables, electoral uncertainty, policy instability, governance quality, and institutional credibility, are significant predictors of investor confidence. Specifically, governance quality emerged as the strongest positive predictor of investor confidence (β=0.485, p<0.001), while electoral uncertainty showed the strongest negative impact (β=-0.420, p<0.001). The regression model explained a substantial portion of the variance in investor confidence (R²=0.742). This study concludes that while political uncertainty significantly undermines investor confidence in Nigeria, the strength of governance institutions and policy stability can mitigate these negative effects. The results reinforce the theoretical frameworks, suggesting that improving political stability and institutional quality can enhance investor confidence and capital market development. Recommendations include strengthening democratic institutions, ensuring policy continuity across political transitions, and enhancing transparency in governance processes.
Abstract: Political uncertainty has become a significant factor affecting investment decisions and market performance in emerging economies. This study empirically investigates the influence of political uncertainty on investor confidence in the Nigerian Stock Market, focusing on the specific dimensions of electoral uncertainty, policy instability, governanc...
Show More
