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Influence of Risk Management Practices on the Financial Performance of Investment Firms Trading at the NSE

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  • Norris Kibe Muhia
  • Agnes Ogada
  • Jane Muriithi

Abstract

This study aims to investigate the influence of risk management practices on the performance of investment firms in Kenya, specifically focusing on the role of risk management practices on the performance of investment firms trading at the Nairobi Securities Exchange. This study used a correlational research methodology and positivist philosophy to investigate how firm-specific characteristics affected the financial performance of 63 investment businesses listed between 2014 and 2023 on the Nairobi Securities Exchange (NSE). Using a census technique, data was gathered from secondary sources such as NSE, CBK, and KNBS. Statistical analysis methods such as SPSS were used to display the results. The findings indicated that risk management strategies positively impact financial performance, with significant effects on ROA, ROE, and composite performance measures, highlighting the critical role of robust risk management in enhancing the economic performance of investment firms trading at NSE. Based on the study findings, investment firms should develop comprehensive risk management frameworks that effectively identify, assess and mitigate potential risks.

Suggested Citation

  • Norris Kibe Muhia & Agnes Ogada & Jane Muriithi, 2025. "Influence of Risk Management Practices on the Financial Performance of Investment Firms Trading at the NSE," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 17(3), pages 106-106, March.
    • Handle: RePEc:ibn:ijefaa:v:17:y:2025:i:3:p:106
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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