Influence of Equity Investments and Financial Performance of Business in Africa. A Critical Literature Review

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.