Corporate Diversification, Macroeconomic Factors and Performance of Quoted Deposit Money Banks in Kenya: An Empirical Assessment


  • Osagie Osifo University of Benin
  • Christopher Ighodaro University of Benin


Income diversification; exchange rate; returns on asset


This study empirically examines the influence of corporate diversification, macroeconomic
factors on performance of quoted deposit money banks in Kenya within a period of 2007- 2017.The
study employs secondary data collected from deposit money banks annual audited financial statements.
Employing the use of descriptive statistics, correlation analysis, panel unit root analysis, co-integration
test and feasible generalized least squares (FGLS), the data were estimated with the aid of E-views 9.0
econometric statistical package. Using dependent variables (Returns on Assets and Tobin Q),
explanatory variables of income diversification, foreign diversification, subsidiary diversification,
exchange rate and inflation rate. The findings revealed that income diversification have positive and
significant effect on all the performance indicators (ROA and TOBIN Q) used in the study and were
significant at 1% significance level. Foreign diversification and Subsidiary diversification have mixed
findings under the two performance variables. Exchange rate has a positive and significant impact on
performance, and inflation rate was negative and significant. This study therefore recommends,
amongst others, that deposit money banks should carefully adopt a strategy that will warranty ideal
location forecasting and execution as this will further boost financial annexation in the system.


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How to Cite

Osifo, O. ., & Ighodaro, C. . (2020). Corporate Diversification, Macroeconomic Factors and Performance of Quoted Deposit Money Banks in Kenya: An Empirical Assessment: Array. Acta Universitatis Danubius. Œconomica, 16(3). Retrieved from



Business Administration and Business Economics