Chief Executive Officer Characteristics and Firm Value: Evidence from Construction and Allied Firms Listed at the Nairobi Securities Exchange, Kenya
Kanang Amos Akims *
Department of Economics, Faculty of Social Sciences, University of Jos, Jos, Nigeria.
Malgit Amos Akims
School of Business and Economics, Mount Kigali University, Rwanda.
Oliver Mukweyi Pyoko
ICT Authority, Kenya.
*Author to whom correspondence should be addressed.
Abstract
The construction sector is considered one of the key sectors driving the economic growth of Kenya. The paper therefore set out to investigate the effect of chief executive officer characteristics on firm value of construction and allied firms listed at the Nairobi Securities Exchange, Kenya. Agency theory and stakeholder theory were used to support the relationship between the research variables. Inferential statistics were based on panel regression analysis. It was established that chief executive officer nationality and age had a significant effect on the firm value of construction and allied firms listed at the Nairobi Securities Exchange, Kenya. It was concluded that chief executive officers of Kenyan origin and young chief executive officers are more effective in enhancing firm value. It was however recommended that non-Kenyan individuals with a good understanding of the Kenyan market can still be considered for the top position of companies. Through the international experience of non-Kenyan chief executive officers, foreign expertise can be introduced to local firms. Young chief executive officers should be considered by listed construction and allied firms to benefit from the aggression and resilience that come with young age. The appointment of young or younger chief executive officers should be done given capacity as well as educational qualifications.
Keywords: Chief executive officer age, chief executive officer characteristics, chief executive officer nationality, construction, allied firms, firm value