ORGANIZATIONAL INNOVATION AND RETAIL INVESTORS' PARTICIPATION IN THE NAIROBI SECURITIES EXCHANGE
Abstract
Purpose of the study: The study examined the effect of organizational innovation by capital market intermediaries on retail investor participation in the Nairobi Securities Exchange.
Research methodology: A positivism philosophy was adopted because it enabled objective measurement and statistical testing of relationships between variables using quantifiable data. A descriptive correlational research design was employed.The target population comprised 112 licensed capital market intermediaries, from which 336 respondents were targeted through a census approach. Data were collected using structured questionnaires, achieving a response rate of 97.33% with 292 usable responses from Chief Investment Officers, Heads of Marketing, and Heads of Innovation/Technology.
Findings: The results show that organizational innovation by capital market intermediaries is positively and significantly related to retail investor participation (β=.764, p<0.05). The null hypothesis is rejected since the p value (0.000) is less than 0.05. Hence, organizational innovation by capital market intermediaries has a significant influence on retail investor participation in the Nairobi Securities Exchange.
Conclusion: The study concludes that organizational innovation by capital market intermediaries has a significant and positive effect on retail investor participation in the Nairobi Securities Exchange. The correlation and regression analysis establish that the number of management changes, speed of decision-making processes, and leadership style collectively create the most powerful driver of retail investor engagement, forming the foundational environment necessary for effective retail investor service delivery.
Recommendations: The study recommends that capital market intermediaries should prioritize organizational restructuring as the foundational enabler of retail investor participation at the Nairobi Securities Exchange. The Capital Markets Authority should develop regulatory frameworks requiring licensed intermediaries to demonstrate minimum organizational standards for retail investor focus, including dedicated retail service structures, measurable retail participation targets, and board-level accountability for retail engagement outcomes.
Keywords: Organizational innovation, retail investors' participation, Nairobi Securities Exchange
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