Financial Information Voluntary Disclosure and Financial Performance of Manufacturing Firms Listed on Nairobi Securities Exchange

Authors

  • Fredrick Ouma
    MSc student, Jomo Kenyatta University of Agriculture and Technology
  • Dr. Gilbert Onchangwa
    Lecturer, Department of Accounting and Finance (DEAF), Jomo Kenyatta University of Agriculture and Technology

Abstract

Purpose: The purpose of the study was to establish the effect of financial information disclosure on the financial performance of manufacturing firms listed on the Nairobi Securities Exchange (NSE).


Material/methods: The study relied on secondary data from 2017 to 2021 for 8 companies listed under manufacturing and allied sectors on the NSE. Descriptive and inferential statistical methods were employed, including correlation and regression analyses, to examine the relationship between financial information disclosure and financial performance. The analysis was conducted using STATA 15.


Findings: The results indicated that financial information disclosure has a positive but statistically insignificant effect on the financial performance of listed manufacturing firms at the NSE.


Conclusion: The study concluded that financial information disclosure positively influences the financial performance of listed manufacturing firms at the NSE, though the effect is not statistically significant.


Value: The study recommended that listed manufacturing firms should adhere to International Financial Reporting Standards (IFRS) and ensure full disclosure of financial information to stakeholders. Additionally, it highlighted the need to increase voluntary disclosure to improve firm performance. For policymakers, the study suggested developing and implementing policies to enhance social accounting information disclosure.