Operational Efficiency and Financial Performance of Manufacturing and Allied Firms Listed at the Nairobi Securities Exchange, Kenya
Year: 2025
Type: article
Abstract: Purpose: A company's financial performance indicates how well it combines policies, operations, and characteristics to gain a competitive edge. It also indicates the percentage of a company's revenue that is distributed to investors. The objective was to establish the effect of operational efficiency on the financial performance of manufacturing firms listed at the Nairobi Securities Exchange. Kenya. Methodology: The study was supported by efficient market hypothesis theory. The study employed a descriptive research design. The study targeted a population of 9 manufacturing firms listed at the Nairobi Securities Exchange in Kenya as of 31st December 2024.A census of all the 9 manufacturing firms listed on the Nairobi Securities Exchange was used as a unit of analysis. Data was gathered from secondary sources through a secondary data collection sheet. Data was sourced from financial and statistical reports released by the NSE and the KMA. Data was analyzed using descriptive and inferential statistics. Findings: The findings of the panel regression model indicated a positive and significant effect between operational efficiency and the financial performance of manufacturing firms listed at the NSE, Kenya. Unique Contribution to Theory, Practice and Policy: The study recommends that manufacturing firms listed at the NSE should develop strategies to establish a firm-specific optimization framework designed to enhance the financial performance of NSE-listed manufacturing firms by integrating and addressing key internal characteristics that influence profitability and sustainability. By adopting a targeted and evidence-based approach through the firm-specific optimization framework, Kenya can empower its manufacturing firms to thrive within their unique structural contexts. Such alignment is not only beneficial to individual firms but is also essential to achieving national development goals under Vision 2030 and the Bottom-Up Economic Transformation Agenda.
DOI: 10.47604/ijfa.3536
Authors: Moses Orwa, Joshua Matanda, Joshua Bosire
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4415113392