COMPARATIVE ANALYSIS OF THE FACTORS INFLUENCING LISTED FIRM’S PERFORMANCE: A CASE OF DAR ES SALAAM STOCK EXCHANGE (DSE) AND NAIROBI SECURITIES EXCHANGE (NSE)

Abstract

Purpose: This paper analyses the factors influencing the performance of an organization. The study attempted to examine factors like; board size, board composition, CEO duality, Firm size, Leverage, and firm age as independent variables and Tobin Q and ROA as dependent variables. Methodology: The study used a quantitative research approach and applied secondary data collected from annual reports. Using the ordinary least square Regression method, the study analyzed 39 non-financial firms listed at Dar Es Salaam Stock Exchange (DSE) and Nairobi Securities Exchange (NSE) for the period from 2016 through 2020. For the data analysis computer software, STATA was used to evaluate the factors influencing listed firms’ performance. Findings: The findings of the study revealed that the board size is positive but insignificantly correlated to return on assets. However, the board size is positive and significantly correlated to Tobin Q. The study also found out that the board structure (CEO Duality) had a significant positive impact on the performance of firms. In addition, the firm size and leverage had a significant negative impact on the performance of the firms. The study revealed that there is a significant impact in both countries as measured using both ROA and TOB. However, the correlation was negative for Tanzania and positive for Kenya. Recommendations: The study recommended that firms must keep their board sizes within the limit of 5 to 8 but more analysis should be done to come up with an optimal size. It was also recommended that the responsibility of stock marketers to firm performance should be re-affirmed.