Regulatory and Political Risk, and Multinational Corporate Strategy in Kenya

Abstract

This study examines the influence of political and regulatory stability on the investment and performance of multinational corporations (MNCs) operating in Kenya from 2010 to 2024. Using secondary data from firm-level financial statements, UNCTAD (2025), the World Bank (2025), and the Central Bank of Kenya (2025), the analysis applies fixed-effects and dynamic panel models to assess how changes in governance quality affect corporate outcomes. Results show that higher political and regulatory stability significantly increases capital expenditure, investment growth, and profitability, while reducing precautionary cash holdings. These findings highlight the central role of institutional quality in shaping multinational strategy and economic resilience in emerging markets, offering critical insights for policymakers and business leaders.