The effect of quality financial reporting on improved investment efficiency: a case of firms listed on the Nairobi stock exchange

Abstract

This project sought to examine the effect of quality financial reporting on improved investment efficiency. A descriptive statistics analysis and regression analysis was done on 34 companies listed on the Nairobi Stock Exchange from 2003 - 2007. The results of the study show that quality financial reporting enhances investment efficiency for capital investment by helping to mitigate both over- and under-investment. The findings further indicate that adjusted overall R-squared is 0.7469 meaning that the regression line explain 74.69% changes in the dependent variable (Table 4). In other words 74.69% changes in investments are caused by the independent variables included in the regression line. Therefore error term or the residue account for the other 25.31%.