Abstract:
The disclosure of relational capital, underpinned by signaling is increasingly recognised as a critical
factor influencing firm value. In the context of NSE listed -firms in Kenya, understanding this
relationship can provide insights into how transparency and stakeholder relationships impact firm
value. The purpose of this study was to establish the relationship between relational capital disclosure
and firm value among firms listed on the Nairobi Securities Exchange (NSE) in Kenya. The study
employed a correlational and longitudinal research design. The target population consisted of sixtytwo (62) Nairobi Securities Exchange-listed firms between 2017 and 2021. A census technique was
used to select all eligible firms to participate in the study. Secondary data was collected using a
secondary data extraction tool. The validity of the research instruments was ensured through reviews
by experts and supervisors, who assessed the content and face validity of the instruments. Reliability
of the instruments was evaluated through a pilot study, where data was collected from a sample of
firms to test the consistency and accuracy of the data extraction tool. The reliability was further
supported by collecting data from audited company annual reports. Both descriptive and inferential
statistics were used for data analysis. Specifically, correlation analysis was employed to examine the
relationship between variables, while multiple linear regression analysis was used to test the
hypotheses using panel data. Our findings indicate a declining trend in relational capital disclosure
over these years. Despite this decline, we find a significant positive relationship between relational
capital disclosure and firm value, measured using Tobin's Q (β=2.930976, P<0.05). These results
underscore the importance of enhancing relational capital disclosure to boost firm value.
