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Objective: The objective of this study is to investigate the influence of financial accountability on the performance of real estate projects in Starehe sub-county, Nairobi County, with the aim of understanding how financial management practices impact project success in the region.
Theoretical Framework: This study is grounded in Agency Theory, formalized by Jensen and Meckling in 1976, which addresses the problems arising in relationships where principals delegate work to agents. The theory provides a foundation for understanding the importance of financial accountability mechanisms in managing principal-agent relationships within real estate projects.
Method: The study employed both predictive correlational and descriptive research designs under a pragmatic research paradigm. Data collection was carried out through structured questionnaires and semi-structured interviews, targeting a sample of 253 respondents including finance managers, project managers, project engineers, and contractors in the real estate sector, with a response rate of 83.8%.
Results and Discussion: The results revealed a significant positive correlation between financial accountability and project performance (r = 0.681, p < 0.001). Regression analysis showed that financial accountability explains 46.4% of the variance in real estate project performance, with a significant positive effect (β = 0.571, t = 13.481, p < 0.001).
Research Implications: The findings provide valuable insights for real estate practitioners and project managers in implementing effective financial accountability mechanisms. These implications encompass improved project control systems, monitoring procedures, and internal controls for funds allocation, which are crucial for ensuring project success.
Originality/Value:This study contributes to the literature by providing empirical evidence of the relationship between financial accountability and real estate project performance in an urban African context. The research's value is evidenced by its comprehensive examination of financial accountability mechanisms in Nairobi's real estate sector, offering practical insights for improving project outcomes.
