The Relationship Between Risk and Growth in Corporate Investment for Firms Listed in the Nairobi Securities Exchange

Abstract

This study on the relationship between risk and growth in corporate investment for firms listed in the NSE was carried out in Kenya. It targeted to investigate the relationship and how it affects growth of the market in general. The study was guided by the following objectives; investigate the relationship between systematic risk and growth in corporate investments within the study period. The study targeted all the listed companies from 2008 to 2012. This was therefore a census covering all the data on stock performance in the bourse. The data was subjected to various tools of analysis to establish any trend that would be used to predict future performance of the market. The finding showed there is a moderate correlation between risk and the growth in corporate investments. The researcher recommends the following: More consultations between the management and shareholders are required to balance growth in assets and the expected returns to investors. This is aimed to reduce any conflicts that might arise and provide an ideal working environment. This leads to enhancing strategic alliance among owners and management for more market growth. The researcher also suggests further studies on this relationship by targeting a larger period and by looking at major political in the country. This could be looked at based on asset growth, market return and the influence of externalities such as political referendums, elections and even terror attacks on major investments in the country.