Voluntary Accounting Disclosures and Market Performance of Non-Financial Firms Listed in Nairobi Securities Exchange, Kenya

Abstract

This study envisaged to determine the effect of voluntary accounting disclosures on market performance of non-financial firms listed in the Nairobi Securities Exchange (NSE). The study was guided by five research objectives namely: to determine the effect of value-added statement disclosure, forward-looking information disclosure, human resource accounting information disclosure, social accounting information disclosure and management discussion and analysis disclosure on market performance of non-financial firms listed in NSE, Kenya. Moderating variable corporate governance attributes was used to assess the effect of voluntary disclosures in the annual reports on market performance of non-financial firms listed in NSE. Performance indicator was market based measurement (Tobin’s Q ratio). The study employed descriptive cross-sectional research design. A census of 45 non- financial firms listed in NSE, was taken. The study used secondary panel data contained in the annual reports of non-financial firms listed in NSE, Kenya. The data was extracted from the NSE hand book for the period 2011-2015 and from companies’ websites. This was complemented by semi-structured questionnaires which were given to 45 Chief Executive Officers. Data analysis was done by both descriptive (measures of central tendency and dispersion) and inferential statistic (multiple regression analysis and correlation analysis) with help of Statistical Packages of Social Sciences (SPSS version 22). The results revealed that there was a significant positive effect of value-added statement disclosure, forward-looking information disclosure, human resource accounting disclosure, social accounting information disclosure and management discussions and analysis disclosure and firm market performance measured by Tobin’s Q of listed non-financial firms in Kenya. Based on these findings the study concluded that value added statement disclosure, forward looking information disclosure, human resource accounting information disclosure, social accounting information disclosure and management discussions and analysis disclosure were key to market performance of non-financial firms listed in NSE. Based on the findings of this research, non- financial firms should increase the level of voluntary accounting disclosures to their stakeholders.