ABSTRACT
Ethics has been a momentous consideration in many professions including business,
politics, medicine, law, and almost every other area of our society. In order for
investors to delve into financial markets, there is a need for intermediaries to act in a
fair manner and bound by legal regulations co-ordinated with financial ethics.
Investor confidence, which is speculative in nature has changed in imperative ways
through time and these changes have significant consequences for financial markets.
Ensuring investor confidence enriches investors’ participation in the market activities
and emboldens saving as well as channeling of savings into productive real
investment, therefore nurturing capital accumulation and efficiency in investment
enhancing real sector growth. The drive of this study was to examine financial ethics
and investor confidence among members of the Nairobi Securities Exchange, Kenya.
The theoretical grounding of this thesis was based on the agency, virtue,
consequentialist, deontological and the efficient market hypothesis (EMH) theories.
Research data was obtained using questionnaires that were availed to active investors
(individual and institutional) who invest within the Nairobi Securities Exchange and
the sample population for the study was 385 respondents. The study utilized
purposive sampling in selecting respondents from the NSE. The study adopted both
descriptive statistics and inferential statistics as the main unit of analysis using
multiple regression equations probit model. The data collected was analyzed using the
Statistical Package for Social Science (SPSS) version 20. Descriptive statistics were
presented using mean, standard deviation, frequencies and percentages while
inferential statistics utilized a multiple regression analysis with a moderating variable
at 5% significance. The study findings established a positive and significant
relationship between ethical principles and codes (R = 0.145, Sig = 0.026) and the
level of investor confidence. The findings also presented a significant relationship
between the level of investor confidence and ethical effectiveness (R = 0.373, Sig =
0.025). In relation to ethical corporate culture, the findings again showed a positive
significant relationship (R= 0.435, Sig = 0.013) on the level of investor confidence in
financial markets. The legal enforcement of the capital market regulations was found
to have a significant moderating effect (R = 0.337, Sig = 0.024) on investor
confidence among members of the Nairobi Securities Exchange, Kenya. The study
concluded that additional initiatives should be done to foster investor confidence
within the financial markets in Kenya such as enhancing financial ethics. The study
correspondingly concluded that ethical effectiveness had the highest magnitude of
influence on investor confidence at the NSE. It was therefore recommended that
CMA should ensure all the employees of the member firms should have the required
training and skills for them to contribute to increased investor confidence. Besides,
CMA should ensure efficacy relating to laws and policies that exist to guide the
conduct of members of the NSE.
NGWIRI, E (2021). Financial Ethics And Investor Confidence Among Members Of The Nairobi Securities Exchange, Kenya. Afribary. Retrieved from https://afribary.com/works/financial-ethics-and-investor-confidence-among-members-of-the-nairobi-securities-exchange-kenya
NGWIRI, EMLYN "Financial Ethics And Investor Confidence Among Members Of The Nairobi Securities Exchange, Kenya" Afribary. Afribary, 01 Jun. 2021, https://afribary.com/works/financial-ethics-and-investor-confidence-among-members-of-the-nairobi-securities-exchange-kenya. Accessed 03 Nov. 2024.
NGWIRI, EMLYN . "Financial Ethics And Investor Confidence Among Members Of The Nairobi Securities Exchange, Kenya". Afribary, Afribary, 01 Jun. 2021. Web. 03 Nov. 2024. < https://afribary.com/works/financial-ethics-and-investor-confidence-among-members-of-the-nairobi-securities-exchange-kenya >.
NGWIRI, EMLYN . "Financial Ethics And Investor Confidence Among Members Of The Nairobi Securities Exchange, Kenya" Afribary (2021). Accessed November 03, 2024. https://afribary.com/works/financial-ethics-and-investor-confidence-among-members-of-the-nairobi-securities-exchange-kenya