Influence of Company’s Growth Rate as Capital Structure Decision on Financial Performance of State-Owned Sugar Manufacturing Corporation Projects in Kenya.
Publication Date: 06/03/2025
Author(s): Mathew Elijah Kawour, Charles M. Rambo, Paul A. Odundo.
Volume/Issue: Volume 8, Issue 1 (2025)
Page No: 133-154
Journal: African Journal of Economics and Sustainable Development (AJESD)
Abstract:
This study explored the relationship between a company’s growth rate, as a capital structure decision, and the financial performance of state sugar corporations in Kenya. The purpose of the research was to assess how growth rate influences financial outcomes in the state sugar sector. Guided by Modigliani and Miller’s (1958) capital structure model and key theories, including Trade-off, Pecking Order, and Agency Cost, the study adopted correlational and descriptive survey designs. The target population comprised 1,145 employees in the state sugar sector, with a sample size of 291 selected using Krejcie and Morgan’s (1970) table. Data were collected through structured questionnaires and interviews and analysed using SPSS Version 25. Descriptive and inferential methods, including Pearson’s correlation and linear regression, revealed a positive correlation (p = 0.000 < 0.05) between growth rate and financial performance. The study concludes that higher growth rates enhance financial outcomes and recommends similar research in private sugar firms for sector-wide knowledge and understanding.
Keywords:
Capital structure; Company growth rate; Financial performance; State-owned sugar projects; Kenya.
