Firms with higher cash flows stand a higher chance of attracting investors seeking efficient opportunities to invest resources. Cash flows reveal positive impact on capital expenditure. There is a negative association among cash flows and CAPEX at low levels of cash flow but positive relationship for greater levels of net cash flow. Cash flows impact on capital expenditure rises as firm size declines. The overall objective of the study was to establish effect of cash flows on the capital expenditure of firms listed on the Nairobi Securities Exchange. It also aimed at reviewing the increasing body of theoretical and empirical studies that have endeavored to examine the range of magnitude and effects of cash flows on capital investment. The free cash flows, the pecking order, and dividend irrelevance theories guided the current study. The current study utilized the descriptive research design. The target population was all the 64 listed firms at the Nairobi Securities Exchange. The study employed a census and it examined the whole population. The unit period of analysis was annual, and data was collected for the period from 2016 to 2020; the period comprised of five years. The study applied correlation analysis and multiple linear regression model with the technique of estimation being Ordinary Least Squares (OLS) so as to establish the relationship of cash flows from operations, cash flows from investing activities, cash flows from financing activities, and firm size with capital investment. The study findings were that cash flows from investing activities, cash flows from financing activities, and firm size have a significant positive correlation with capital investment. However, the study findings established that cash flows from operating activities do not have a significant correlation with capital investment. Additionally, the study findings established that model entailing; cash flows from operations, cash flows from investing activities, cash flows from financing activities, and firm size explains capital investment to a very great extent with a coefficient of determination value of 45.8%. Further study findings were that that the model consisting of cash flows from operations, cash flows from investing activities, cash flows from financing activities, and firm size significantly predicts capital investment. Final study findings were that cash flows from investing activities and firm size individually have a significant positive relationship with capital investment but however cash flows from operations and cash flows from financing activities do not have a significant relationship with capital investment. Policy recommendations are made to the government officials and policy formulators in the financial sector, mainly the regulator, the Capital Markets Authority (CMA), and the Treasury to focus on cash flows when endeavouring to boost firm value by increasing capital investments in order to spur the development of capital markets. Additional recommendations to policy makers is to majorly focus on cash flows apart from cash flows from operations and firm size when intending to augment capital investment. Recommendations are generated to the financial analysts to estimate market capitalization, and by extension, securities value, by using cash flows, and in extension, firm size. Henceforth, this study will offer them immeasurable insights, which will help them when advising their clients. Recommendations are generated to consultants and listed firms practitioners to mainly focus on cash flows apart from cash flows from operations and firm size to time strategies like securities exchange listings, rights issues, and dividend pay-outs

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