Thesis & Dissertation

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Browsing Thesis & Dissertation by Author "JOHN AYOBAMIBO OLAYIWOLA"

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    DIVIDEND PAYOUT POLICY, FIRMS’ INVESTMENT BEHAVIOUR AND VALUE OF SELECTED QUOTED COMPANIES IN NIGERIA (2001-2016)
    (2019) JOHN AYOBAMIBO OLAYIWOLA
    The study examined the trend and pattern of corporate dividend from 2001 to 2016, assessed the factors influencing corporate dividend pay-out policy of quoted Nigerian companies and investigated the long run and short run effects of corporate dividend policy on corporate performance of quoted companies in Nigeria over the study period. It also analysed the dynamic relationships among dividend payout policy, investment behaviour and corporate value of quoted companies and examined the interactive effects of dividend pay-out policy and firms’ investments on corporate value of listed companies in Nigeria. These were with the view to providing information on the relevance of dividend pay-out for policy formulation and implementation in enhancing investment decisions and performance of quoted companies in Nigeria. The study employed secondary source of data collection. A sample of 80 quoted companies out of 227 listed companies in Nigeria were purposively selected based on availability of required information in their annual reports and the existence of the companies over a period of 2001-2016. Year 2001 was chosen as base year because that was the third year in which democracy was restored in Nigeria and during this period, various economic policies and reforms were made by the government that affected the activities and operations of quoted companies in Nigeria. Secondary data on firms’ age, property, plant and equipment, dividend per share, dividend pay-out, agency cost, return on equity, return on total assets, leverage, price-earnings ratio and share price were all obtained from the audited Annual Reports of the selected companies and the fact book published by Nigeria Stock Exchange. Data on gross domestic products, inflation, exchange rate and capital were obtained from the World Bank. Indicator and statistical bulletin published by Central Bank of Nigeria, while oil price was sourced from Organisation for Petroleum and Exporting Countries’ annual oil price statistics. Corruption index and legal system index were also obtained from International Country Risk Guide published by World Bank. Data collected were analyzed using percentages, generalized method of moments, autoregressive distributed lag and structural vector autoregression (SVAR). The results showed that the trend of dividend pay-out of quoted companies in Nigeria was increasing at a diminishing rate as the pattern of dividend payout showed 7.9% increase in year 2001 and finally stood at (-5%) in year 2016, that is, increasing by 10% when compared to year 2010. Results further revealed that GDP (t = 58.56; p < 0.05), GFCF (t = 35.768; p < 0.01), Inflation (t = 72.67; p < 0.05), Oil (t = 12.218; p < 0.05), Legal (t = 48.94; p < 0.05) and lag of DPS (t = 48.94; p < 0.05) all wielded positive and significant impact on dividend policy, while other variables exercise a negative but significant influence on corporate dividend policy of Nigerian companies. In addition, results also revealed that dividend policy negatively and significantly influences performance of companies in the short run (t = 10.76547; p < 0.05), while in the long run, the impact of dividend policy was positive and also significant (t = 2.94924; p < 0.05). Results of the SVAR estimates showed that the response of firms’ investment to shocks in the market value was 1.98% in the 10th period of the forecast horizon while that of dividend was 7.04%. Finally, the estimation results revealed that the interactive effect of dividend policy and investment was negative and significant (t = 84.38; p < 0.05) on the measures of corporate performance of quoted Nigerian companies. This study concluded that the responses of investment policy and market value to shocks in dividend policy had contractionary effects and as such could lead to an enhanced investment decision and market values of quoted Nigerian companies.