Influence of Equity Investments and Financial Performance of Business in Africa. A Critical Literature Review
DOI:
https://doi.org/10.47941/jar.1042Keywords:
Influence, Equity Investments, Financial Performance, Business, Africa.Abstract
Purpose: Investors can be categorized as either institutional or individual. The management is concerned with the formulation of investment decisions. These investments are key to attaining success thus ensuring increased firm valuation. The overall objective of this study was to assess examine influence of equity investments and financial performance of business in Africa.
Methodology: The paper used a desk study review methodology where relevant empirical literature was reviewed to identify main themes and to extract knowledge gaps.
Findings: The study concluded that equity investments have a weak link on explaining the profitability of investments business in Africa. The findings also affirmed that equity investments have a positive significant effect on liquidity. The results indicated that an increase in the equity holding within the firm will result in improvements in the current ratio within the firm.
Unique Contribution to Theory, Policy and Practice: The study recommends that the capital markets authority to rely on the findings of this study when developing benchmark guidelines on the minimum holding on various investment portfolios. This will ensure there are set regulatory requirements that will guide collective investment schemes in the management of their investors funds which can significantly improve the public confidence in the institutions and drive their financial performance.
Downloads
References
Adebayo, A. G. (2016). Economic Growth and Investments in Nigeria: A Synthesis of Sustainable National Security and Enabling Political Environment. World Journal of Finance and Investment Research, 1(1), 13-26.
Aroni, J., Namusonge, G., & Sakwa, M. (2014). The Effect of Financial Information on Investment in Shares-A Survey of Retail Investors in Kenya. International Journal of Business and Commerce, 3(8), 58-69
Babalola, Y. (2013). The Effect of Firm Size on Firms Profitability in Nigeria. Journal of Economics and Sustainable Development, 4(5): 90-94.
Capital Markets Authority. (2018). The CMA Quarterly Capital Markets Statistical Bulletin – Q2.2018. Nairobi, Kenya: Capital Markets Authority.
Carzola-Papiss, I. (2011). Performance and risk in the Brazilian banking industry. Heliyon, 7(3).
CBA Group. (2019, May 03). Money Market Fund. Retrieved from CBA Group: https://cbagroup.com/treasury/cba-to-acquire-crane-bank-rwanda-limited/money-market-fund/
Chepkorir, A. (2018). Influence of Portfolio Diversification on Financial Performance of Commercial Banks Listed on Nairobi Securities Exchange, Kenya. Doctoral dissertation, JKUAT.
Choi, N., Fedenia, M., Skiba, H., & Sokolyk, T. (2017). Portfolio concentration and performance of institutional investors worldwide. Journal of Financial Economics, ,123(1), 189-208
Cytonn. (2019, May 03). money-market-fund. Retrieved from Cytonn Investments: https://cytonn.com/investments/money-market-fund
Fabozzi, (. F. (2002). Foundations of Financial Markets & Institutions, 3/E. Pearson Education.
Fama, E. (1970). Efficient capital markets: A review of theory and empirical work, Journal of Finance, 25, 383−417.
Fox, J., & Monette, G. (1992). Generalized collinearity diagnostics. Journal of the American Statistical Association, 87(417), 178-183.
Francis, J. C., & Kim, D. (2013). Modern portfolio theory: Foundations, analysis, and new developments. John Wiley & Sons.
Garson, G. D. (2012). Testing statistical assumptions. Asheboro, NC: Statistical Associates Publishing.
Gartner, W. B. (2006). Is extraordinary growth profitable? A study of Inc. 500 high–growth companies. Entrepreneurship theory and practice, 27(1), 65-75.
Gathenya, J. M. (2015). Impact of Foreign Portfolio Equity Investments on the Market Capitalization of the Nairobi Securities Exchange (2004-2013). Doctoral dissertation, United States International University-Africa).
Gauvreau, C., Ilies, L., & Stegerean, R. (2011). Determinants of Organizational Performance: The Case of Romania. Management & Marketing Challenges for the Knowledge Society, 6 (2), pp. 285 – 300.
Ishaya, L. C., & Abduljeleel, B. O. (2014). Capital Structure and Profitability of Nigerian Quoted: The Agency Cost Theory Perspective. American International Journal of Social Science, 3(1), 139-140.
James, S. (2009). Incentives and investments: evidence and policy implications. Washington, DC: World Bank.
Kagunda, F. (2011). Asset Allocation by Fund Managers and the Financial Performance of Unit Trusts in Kenya. Unpublished MBA Project, University of Nairobi.
Kalsi, K. (2013). Relationship between Foreign exchange trading and financial performance
Kimani, M. P., & Aduda, D. J. (2016). The effect of portfolio size on the financial performance of portfolios of investment firms in Kenya. International Journal of Finance and Accounting, 1(2), 77-94.
Kimeu, F. M. (2015). The effect of portfolio composition on the financial performance of investment companies listed in Nairobi securities exchange. University of Nairobi.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Philis Njeri
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
