Influence of Financial Flexibility on Performance of State-Owned Sugar Manufacturing Corporation Projects in Western Kenya

Abstract

This study examined the influence of financial flexibility on performance of State sugar manufacturing corporations in Kenya. The study was guided by Modigliani and Miller’s capital structure model mainly (trade-off, pecking order and agency cost) theories, and was based on pragmatic paradigm which provides for the use of both qualitative and quantitative research methodologies. It targeted a population of 1,145 people, drawn from employees of State sugar corporations, and used a sample size of 291, obtained from Krejcie and Morgan's (1970) Table. A structured questionnaire and interview guide were used to collect data. SPSS version 25 was used to analyse data and Hypothesis was tested at a=0.05 significance level. Pearson’s correlation and linear regression analysis showed a positive correlation between the variables (p = 0.000 < 0.05), implying that financial flexibility significantly influences the performance of State sugar firms. It was recommended that, to enhance financial flexibility in State sugar corporations, the Government should focus on strategies that help reduce costs, improve revenue generation, and strengthen financial management practices.