An Empirical Investigation of the Impact of Dividend Policy on the Performance of Firms in Developing Economies: Evidence from Listed Firms in Nigeria

摘要

This study investigates the possible impact of dividend policy on the value and performance of firms in developing economies. The data sample for this study is drawn from 81 firms listed on the Nigeria Stock Exchange during the period 2001 to 2010. The study employed the panel data regression model to analyze the data and to investigate the possible link among the variables identified. The result of the investigation provides empirical evidence to support the view that dividend policy is relevant in explaining the value and performance of firms in developing economies, especially listed firms on the Nigeria Stock Exchange. The findings revealed a significant positive impact of dividend payout on the performance of firms, measured as return on assets and return on equity. Also, the analysis revealed that firm’s dividend policy has a significant positive correlation with the firm’s profitability, proxied by return on assets. The finding confirms the proposition that dividend policy is an important determinant of firm performance. The study suggests policies that may help to improve the value and performance of the firm while contributing to shareholders’ wealth maximization.