Vol. 1 No. 1 (2023)
Articles

DOES CORPORATE GROWTH OPPORTUNITIES AFFECT THE DYNAMISM OF DIVIDEND PAYOUT POLICY OF LISTED NON-FINANCE FIRMS IN NIGERIA?

Ashara Obiageli Ebere
Department of Accounting, Chukwuemeka Odumegwu Ojukwu University, Igbariam Campus. obyashara@yahoo.com
Onuora JKJ, PhD.
Department of Accountancy, Chukwuemeka Odumegwu Ojukwu University, Igbariam Campus. joshuaonuora@gmail.com
Ofor T.N, PhD
Department of Accountancy, Chukwuemeka Odumegwu Ojukwu University, Igbariam Campus. Kechi4lv@yahoo.com

Published 2023-08-10

How to Cite

Ashara Obiageli Ebere, Onuora JKJ, & Ofor T.N. (2023). DOES CORPORATE GROWTH OPPORTUNITIES AFFECT THE DYNAMISM OF DIVIDEND PAYOUT POLICY OF LISTED NON-FINANCE FIRMS IN NIGERIA?. Open Access Journal of Business and Entrepreneurship , 1(1), 15-32. https://www.openjournals.ijaar.org/index.php/oajbe/article/view/76

How to Cite

Ashara Obiageli Ebere, Onuora JKJ, & Ofor T.N. (2023). DOES CORPORATE GROWTH OPPORTUNITIES AFFECT THE DYNAMISM OF DIVIDEND PAYOUT POLICY OF LISTED NON-FINANCE FIRMS IN NIGERIA?. Open Access Journal of Business and Entrepreneurship , 1(1), 15-32. https://www.openjournals.ijaar.org/index.php/oajbe/article/view/76

Abstract

We examine the dynamic response of dividend policy to the growth opportunities of listed non-financial firms in Nigeria from 2012 to 2021. Specifically, the explanatory variable of the study growth opportunities while firm size, and free cash flow. The dependent variable of dividend policy dynamics is proxied in terms of dividend per share and dividend payout. Specifically, the study conducts pre regression analysis which includes descriptive statistics and correlation matrix analysis. A critical examination of all the diagnostic tests revealed that the model failed the normality assumption of the OLS estimates. However, the study carefully interprets the p-value of the GMM step II regression estimates. Based on the findings of the study, it is concluded that an increase in the growth opportunities of listed non-finance firms in Nigeria significantly reduces dividend per share and dividend payout during the period under study. The study recommends that management of listed non-finance firms in Nigeria should be cautious when aggressively pursuing growth opportunities in the form of investment in asset as this will reduce dividend payment and discourage external fund sourcing. Specifically, the study recommends that investors seeking for dividend payment should be cautious about firms that are actively looking for investment opportunities since they tend to adopt a low dividend payout policy because the cash flows will be used up for the investment and not to pay dividend. The study recommends that investors should look out for non-finance firms with large asset base since large firms are supposedly mature with easier access to capital markets, which reduce their dependence on internal funds. Thus, it should be easier for them to pay more dividends. This shows that large firms can afford to pay higher dividends than the smaller ones and thus provides an opportunity for investors to invest their monies since dividend payout is certain.

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