EFFECTS OF CROSS-BORDER LISTING ON FINANCIAL PERFORMANCE : EVIDENCE FROM FIRMS LISTED AT THE NAIROBI SECURITIES EXCHANGE
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Date
2025-09
Authors
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Journal ISSN
Volume Title
Publisher
THE CATHOLIC UNIVERSITY OF EASTERN AFRICA
Abstract
An organization's level of financial performance serves as the foundation for gaining people's commitment to help it achieve its objectives. The NSE gives businesses a place to develop and thrive, which promotes economic expansion and the development of jobs. Furthermore, the NSE contributes to the expansion of the national economy and plays a significant role in guiding share transactions for the listed businesses. Examining the impact of cross-border listing on the financial performance of firms at the NSE is the main aim of this research. The specific aims were to determine the impact of trading volume, investors’ base, liquidity, and market capitalization on the financial performance of firms listed at the Nairobi Securities Exchange. The research also sought to evaluate the regulating impact of institutional size on the association between cross-border listing and the cross-listed companies’ financial performance. The study was informed by market segmentation theory, modern portfolio theory, liquidity preference hypothesis, and investor recognition hypothesis. Since the current study utilized quantitative data only, positivism was adopted. The research used an event study methodology. The researcher collected quantitative data using a secondary data collection sheet. Before being entered into the E-views (v-10) software program for analysis, the data was filtered and screened for accuracy, missing values, and outliers. Descriptive statistics have been used. Inferential analysis involved multiple regression analysis and a moderated multiple regression. The study found that trading volume had a favorable and significant effect on NSE companies performance after cross listing (β=0.812, p=0.000). Further results exhibited that investors base had a satisfactory and noteworthy impression on NSE companies performance after cross listing (β=0.330, p=0.000). Liquidity had a favorable and noteworthy impression on NSE companies performance after cross listing (β=0.057, p=0.001). Market capitalization had a favorable and substantial impact on NSE companies success after cross listing (β=0.313, p=0.023). In addition, firm size moderates the association amongst cross listing and success of all the cross listed firms in Kenya. The study concluded that Cross-listing is a good means for attracting additional investors from foreign stock markets. To increase trading volume for cross-listed firms, companies should consider reducing minimum trading units, expanding operations, and ensuring strong financial statements. The managers of cross listed firms should focus on leveraging the increased visibility. Strong financial statements that clearly reflect a company's performance and financial position can attract more investors, leading to increased trading. The managers of cross listed firms should focus on increasing the scale of operations and expanding into new markets can generate more positive news and attract investors, which can increase trading volume. To enhance market capitalization, the CMA could implement a multi-pronged approach focusing on promoting good corporate governance, fostering a robust regulatory framework, and encouraging a wider range of capital market products and services.
Description
Dissertation
Keywords
Cross-border listing, financial performance, Nairobi Securities Exchange, listed firms, international capital markets, corporate finance, Kenya