DIVIDEND PAYOUT AND FINANCIAL PERFORMANCE OF LISTED FIRMS IN NIGERIA
Keywords:
Dividend payout, Financial performance
Abstract
This study analysis dividend payout and financial performance in the quoted financial firms in Nigeria. Annual time series data for the period 2006-2017 was sourced from the Central Bank of Nigeria statistical database and used to estimate both long and short-run relationships as well as causal effects. The Eview9 Statistical Software was employed to analyze the data empirically. The unit root test shows that all variables to be evaluated at the first difference I(1), utilizing the trend of the variables which were discovered to possess unit root and were stationary at the first difference as the all exhibited ADF t-statistics greater than the critical values at all levels such as 1%, 5%, and 10%, in simpler terms. The regression analysis was adopted with OLSM shows The R-squared (R2) coefficient of correlation, showing an output of 0.520690, signifies that the predictors account for approximately 52 percent (%) variation in the criterion variable while 48% are captured by other variables not in the model (The white noises or unobserved variables), while the adjusted R-squared 47.6103, showing the coefficient of variation with a relationship of 47.6103%, which indicate credibility in the goodness of fit in the model. However, the Durbin Watson reveals an output of 2.363233 shows the validity and reliability in the relevant range. The Granger Causality test shown from the results indicates there are three uni-directional and non-bi-directional causality among the variables. Overall, all the results obtained are in line with apriori expectations that profit after tax Net profit margin and liquidity are being influenced by dividend payout ratio in the short run and the long run. Based on the conclusive analysis, it could be recommended among others that the study recommends that financial institutions should have monitoring and evaluation skills to promote growth in dividend per share.
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References
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Foong, S.S., Zakaria, N.B. & Tan, H.B. (2007). Firm performance and dividend- related factors: The Case of Malaysia. Labuan Bulletin of International Business & Finance, 5, 97-111.
Giang, N.T. & Tuan, D.A. (2016). Financial performance, dividend payment, and firm value an exploratory research on Vietnam listed firms in the food and drink industry. VNU Journal of Science: Economics and Business, 32 (2), 47-57.
Georgen, M. Correia, S. L. &Renueboog, L. (2004).Dividend policy of German firms. A
Dynamic Panel Data Analysis of Partial Adjustment Model Finance Working
Paper No. 45.
Glen, J. Karmokolias, Y. Miller, R. & Shah, S. (1995). Dividend policy and behavior in emerging markets. International Finance Corporation, Discussion Paper #2, 1994.
Granger G. & Newbold P. (2012).Time Series Regression with a Unit Root.Econometrical, 55(15), 15-25.
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Guay, W. and Harford, J. (1999).The cash-flow permanence and information content of dividend increases Vs Repurchases.Journal of Financial Economics, 1-42.
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Published
2021-12-27
How to Cite
Confidence O, A., Akani, F. N., & Micah, L. (2021). DIVIDEND PAYOUT AND FINANCIAL PERFORMANCE OF LISTED FIRMS IN NIGERIA. GPH-International Journal of Business Management, 4(12), 37-52. https://doi.org/10.5281/zenodo.6992185
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