Factors Influencing Dividend Payout Policy of Firms Listed on the Nigerian Stock Exchange

Dividend policy decisions in the emerging markets have continued to receive attention lately in academic research due to the differences observed between developed and emerging markets and sparse empirical evidence in this area. This research is directed towards the emerging markets in Africa. It investigates dividend decisions in 299 companies listed in Nigeria on Nigerian stock exchange market. This paper compares dividend decisions in the pre-crisis, crisis and post-crisis periods. Six possible determinants of dividend policy were analyzed using correlation and multiple regression analysis for a period of 13 years (2002 to 2014). The companies are segregated into active and dead groups for the purpose of the analysis. This paper contributes to the current body of knowledge by giving more insights to dividend policy in the largest economy in Africa taking account of the financial crisis of 2008. Liquidity and growth opportunities are common predictors in the three periods. Results are in support of agency, pecking order and signalling theories. The predictors in the regression model explain 42% variability in dividend policy before the crisis in Nigeria but about 20% during and afterwards.