Effect of Corporate Diversification on Capital Structure! Evidence from Listed Firms in Nairobi Security Exchange

The purpose of the study was to determine the effect of corporate diversification on capital structure. The study used longitudinal research design. Using a panel data model, the study estimated the effect of product and geographical diversification on the firm capital structure.  A sample of 49 firms consistently trading in Nairobi security exchange between 2009 and 2014 was used. Using random and fixed effect, the study found that product diversification has no significant effect on capital structure, while geographic has a significant negative effect on capital structure. This infers that geographically diversified firms are using more but less risky debts than more product-diversified firms