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Research Paper | Finance | Kenya | Volume 12 Issue 9, September 2023 | Popularity: 5.1 / 10

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Investing Practices and Firm Sustainability: A Comprehensive Analysis of Water and Sanitation Companies (WASCO's) in Kenya

David Ndumo, David Kiragu, Dr. Mohamed Shano

Abstract: Sustainability of the Water and Sanitation Companies (WASCO) is a global problem. This phenomenon is a complex balance between water access and water quality. The problem is more pronounced on water access compared to water quality. A World Health Organisation report 2022 indicates that worldwide, 1.4 million people die annually from diseases related to poor water access, sanitation and hygiene. Kenya has an estimated population of 53 million people. Statistics indicate that approximately 53% and another 77% have no access to safe water and improved sanitation respectively, hence making water and sanitation access a national problem. The water and sanitation sector is one of the significant sectors in Kenya, contributing approximately 5.78% of national employment and further supports among other sectors; agriculture, forestry and fishery. Water access is the single most contributor to food insecurity in Kenya. In the year 2022, Kenya ranked bottom 30 among 121 counties in terms of food security. Economic theory points that effective financial management can contribute to sustainability of a corporate firm. Guided by stakeholder theory, this study examined the influence of investing practices on sustainability of WASCO in Kenya. The study adopted the conservativism research philosophy and a descriptive design. From a population of 91 WASCOs regulated by WASREB, a sample size of 46 water companies was purposively selected. Primary data was collected using a likert scaled questionnaire while secondary data sheet was used in the case of data collected from the annual WASREB reports. A pilot study was carried out to test the reliability and validity of the data collection instrument. Cronbach's alpha coefficient was used to assess reliability of the instrument and Kaiser-Meyer-Olkin test and Bartlett's Chi-Square test of Sphericity in the case of validity. Tests of regression assumption of linearity, autocorrelation and Gaussian distribution were carried out using person correlation coefficient, Durbin-Watson d statistics and Q-Q plot respectively. Bivariate linear model was utilised for inferential analysis. The findings showed that investing practices explained approximately 85.4% of WASCO sustainability. ANOVA's F-statistics of 82.044 and associated p value of 0.000 indicate that there is statistically significant influence of investing practices on sustainability of WASCO. The Beta coefficients show highest influence of ?=14.806 for modernization investing practices followed by ?=8.588 for replacements investing practices and ?=4.350 in the case of expansion investing practices. The study recommends the focused deployment and deepening of strategic investing practices since they have a strong bearing on sustainability of these firms.

Keywords: Sustainability, Expansion, Replacement, Modernization

Edition: Volume 12 Issue 9, September 2023

Pages: 1344 - 1349

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