The Mediating Effect of Firm Growth on the Relationship between Capital Structures and Value of Nonfinancial Firms listed at the Nairobi Securities Exchange (NSE

This study examines the mediating effect of firm growth on the relationship between capital structure and firm value among non-financial listed firms at the Nairobi Securities Exchange. Using hypotheses formulated from existing literature as per the gaps identified and tested. A target population of 36 non-financial firms at the NSE was selected. With a positivistic research philosophy complemented with descriptive research design such as mean, standard deviation, coefficient of variation, kurtosis and skewness and correlation analysis employed. The study used stepwise multiple regression analysis and in testing of hypothesized variables. Capital structure research being one of the most sensitive areas of corporate finance and decisionmaking because of the interrelationships with other components of financial decision. Findings pointed that firm growth has a significant mediating effect and is thus a critical tool that can be used by management when doing capital structures adjustments to ensure efficiency and optimality as firms grow. Policy makers are expected to adopt the results in monitoring listed firms’ investment and funds are raised in the capital markets to reduce the delisting of companies from the NSE owing to non-performance. Capital structure, financial performance, Firm growth, firm value, macroeconomic factors