Decision to pay dividends and ownership structures in Nigeria

Empirical evidence on how ownership structures influence decision to pay dividends remain unclear in the dividend policy literature. This paper is set to investigate the association between ownership structures and decision to pay dividends. The sample firms of this study consist of non-financial fi...

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Bibliographic Details
Published inInternational Journal of Banking and Finance Vol. 14; p. 27
Main Authors Adamu, Adamu Idris, Ishak, Rokiah, Hassan, Nor Laili
Format Journal Article
LanguageEnglish
Malay
Published Kedah Universiti Utara Malaysia 01.06.2020
Subjects
Decision to pay dividends
Dividends
emerging market
Institutional investments
ownership structures
Nigeria
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Summary:Empirical evidence on how ownership structures influence decision to pay dividends remain unclear in the dividend policy literature. This paper is set to investigate the association between ownership structures and decision to pay dividends. The sample firms of this study consist of non-financial firms listed on the Nigerian Stock Exchange for the period 2011 to 2015 with 270 firm-year observations and logit regression models used to examine the relationship. The study revealed strong evidence that institutional investors were positively related to the decision to pay dividends. However, managerial shareholding was found to have an inverse effect on firms’ probability to pay dividends. Additional analysis was carried out only on dividend payers and the results were also consistent with the hypothesis. Despite this, the managerial investors were somehow weak when the sample was reduced to dividend payers. Cumulatively, the results are robust and show support of the agency theory and hence, imply that institutional investors in Nigeria have preference for dividend payers.
ISSN:1675-722X
2811-3799
2590-423X
1675-722X
DOI:10.32890/ijbf2019.14.0.9910