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THE EXTENT OF DEBT FINANCING WITHIN STATE-OWNED CORPORATIONS IN KENYA
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Micah Odhiambo Nyamita 
, Nirmala Dorasamy , Hari Lall Garbharran
Abstract
The public sector reforms’ programme in Kenya, has witnessed five state-owned corporations being privatised, and several more, from hotels to banks, have been scheduled to be privatised. However, many of Kenya’s state-owned corporations are in considerable debt, which reduce their value in the process of privatisation. This study attempted to determine the extent and the theory suitable for explaining debt-financing within the state-owned corporations in Kenya from 2007 to 2011. The study applied both descriptive statistics and a hybrid of cross sectional and longitudinal quantitative surveys. The results observed some level of stability on the aggregate long-term debt ratios, with minimal use of stock market instruments, which implied the application of the agency theory.
Keywords: Debt Financing, Financial Leverage, Pecking Order Theory, Trade-Off Theory, Agency Theory, State-Owned Corporations
How to cite this paper: Nyamita, M. O., Dorasamy, N., & Garbharran, H. L. (2015). The extent of debt financing within state-owned corporations in Kenya [Special issue]. Corporate Ownership & Control, 12(4), 895-905. https://doi.org/10.22495/cocv12i4csp10
