Firm Characteristics, Innovation, and Financial Resilience under Austerity and Survival of Financial Institutions in Uganda
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Date
2018-10
Authors
Mugumya, Elizabeth
Journal Title
Journal ISSN
Volume Title
Publisher
Makerere University Business School
Abstract
Globally, the survival of firms is a much sought after by business managers and other stakeholders because of its underlying benefits in creating value for key stakeholders of a firm including boards, policy makers, regulatory agencies, shareholders, staff, suppliers and customers. However, it has remained elusive as statistics indicate that several giants such as Lehman Brothers and Enron collapsed partly due to their failure to manage shocks and uncertainties. Uganda is not an exception either as several indigenous firms have gone out of business, put under receiverships, forming mergers and others sold off. Faced with this uncertainty, a study was initiated to explore the relationship between firm characteristics, innovation, financial resilience under austerity and survival of financial institutions in Uganda. Specifically, the study was guided by the objectives of identifying the relationship between firm characteristics and survival of financial institutions, establishing the relationship between innovation and survival, assessing the relationship between financial resilience under austerity and survival of financial institutions, ascertaining the relationship between firm characteristics, innovation and financial resilience under austerity among financial institutions as well examining the combined relationship between firm characteristics, innovation, financial resilience under austerity and survival of financial institutions.
The study employed a cross sectional research design in which views from CEO/General Managers, Operational officers, Chief finance officers and Risk officers from 44 financial institutions were sampled of which 21 banks, 4 MDIs and 15 insurance companies successfully responded giving a response rate of 40 (90.9%). Both descriptive statistics of mean and standard deviation as well as inferential statistics of correlation and regression analysis were used in the interpretation and analysis of the study findings. In addition, quantitative approach was also used in which numerical data was used to interpret the study findings.
The findings found that unlike firm size, number of branches, employees and number of products, firm characteristics of turnover and category significantly relate to firm’s survival. Innovation is also predictive of firm survival. Financial resilience under austerity was significantly and positively related to firm survival. Moreover, the study findings revealed that a combination of firm characteristics, firm innovation and financial resilience under austerity explained a significant contribution in the survival chances among financial institutions. The mediating effect of financial resilience under austerity was found to be significant only with innovation. It was recommended that managers should put much effort on designing mechanisms aimed at boosting growth in turnover, invest in innovation and should devote much effort to increase their level of financial robustness if they are to remain in business
Description
A Dissertation submitted to Makerere University in Partial Fulfillment for the Award of the Degree of Master of Accounting and Finance of Makerere University
Keywords
Firm Characteristics, Innovation, Financial Resilience, Financial Institutions, Uganda, Austerity and Survival
Citation
Mugumya, E. (2018). Firm Characteristics, Innovation, and Financial Resilience under Austerity and Survival of Financial Institutions in Uganda. Unpublished Master’s Dissertation. Makerere University Business School, Kampala, Uganda.