Abstract:
P
urpose:
The
purpose of this study
was
to
determine
the
effect of
corporate governance on
firm value
among firms listed
o
n
the
Nairobi and Uganda Securities Exchange.
Agency and
Resource
-
Based theories
g
uide
d
the study.
The p
ositivism
research paradigm
was
adopted.
Methodology:
The study
use
d
panel research design and the data
was
obtained
through
content analysis
from audited financial statements spanning from 2012 to 2019
and only 48
firms from NSE and 12 firms from USE
met
the inclusion and exclusion criteria.
Stationarity
was
checked using panel unit root tests
and the data were stationary at levels
. Hausman te
st
was
used for model selection
and
the
fixed effect model was selected over random effects
.
Results:
from the
direct effect
analysis revealed that in
securities
exchange,
the
board size
,
board independence
,
and board
expertise as
proxies of corporate governance affected the firm
value. In contrary to this, board
diversity in
both case
s did not significantly affect
the firm
value.
However, in USE board independence negatively affect firm value.
Conclusion/implication:
T
he
study sh
ows
that
corporate governance
determines
the
value of
the firm
. As the practical
contribution
,
there is
a
need to increase board size and board
diversity to enhance firm value in listed firms
.
