Firm level determinants, ownership structure and dividend policy of listed non-financial firms in Nigeria

Abstract

Researchers and policymakers in both developed and developing economies have acknowledged the vital roles played by corporate dividend policy in enhancing shareholders wealth. Although there is a growing number of studies on corporate dividend policy, the present study is strategically designed to observe the moderating effects of industry munificence on the relationship between firm-level determinants and ownership structure on dividend policy of listed non-financial firms in Nigeria. The study employed a quantitative research approach and utilised data from 62 non-financial listed firms on the Nigerian Stock Exchange for the period between 2008 and 2017. The data collected were analysed through the aid of static and dynamic models such as Pooled Ordinary Least Squares, Fixed Effect analysis. Results supported 12 out of 22 hypotheses developed. Remarkably, firm-level determinants and ownership structure significantly influence dividend policy. Besides, industry munificence moderated these relationships. Specifically, there was a stronger positive relationship between firm-level determinants and ownership structure on a dividend policy for firms with high industry munificence as opposed to firms with low levels of industry munificence. In general, these findings provide an alternative framework for investors and stock market participants to improve their investment decisions. On the other hand, it will equally enhance board members understanding on which firm-level determinants and ownership structure variables are more influential in developing and implementing firms’ dividend policy since effective and efficient dividend policy maximises shareholders wealth.