Purpose: The study aimed to examine the interaction between liquidity risk and the firm's value among Kenyan SACCOs.
Research methodology: This study adopted the positivism research philosophy and utilised both descriptive and causal research designs. The study targeted all the 164 licenced SACCOs in Kenya. A sample made up of 115 respondents was selected using a stratified random sampling method. The study utilized secondary data obtained from organization’s published financial statements. Analysis of data was done using descriptive statistics and inferential analysis.
Results: The study results illustrated that value of the firm was positively correlated with liquidity risk which significantly and favourably impacted the firm value; (β=0.014577, P=0.001).
Limitations: The analysis and conclusions reached in this study were limited to data gathered for the five-year duration between 2012 and 2016.
Contribution: This study is useful to the management of SACCOs and the Kenyan government to understand better how financial risk management can improve their firms' value. The study adds to the existing knowledge of financial risk management and firm value.
Keywords: Savings and credit cooperatives, Liquidity risk, Firm value
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (CC BY-SA 4.0) that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.