Empirical Examination of the Determinants of Dividend Payout of Quoted Agro based Firms in Nigeria


    Authors:

    Bassey Nsikan Edet, Ikpe Imoh Kingsley and Edet, Mfon Efiong

    Citation:

    Edet, B. N. Kingsley, I. I. and Efiong, E. M. (2015). Empirical Examination of the Determinants of Dividend Payout of Quoted Agro based Firms in Nigeria. Bulletin of Business and Economics, 4(4), 223-231.

    Abstract:

    This study examines the factors affecting dividend payout of quoted agro-based firms in Nigeria. Data sourced from a sample of 15 agro-based firms for the period 2007-2013 were analyzed using the modified Litner’s model base on Ordinary Least Squares (OLS). Data were first examined for stationarity using the Augmented Dickey Fuller (ADF) test. Result revealed that all the variables were stationary at levels except leverage, liquidity and retained earnings that were stationary at first difference. The OLS result showed that previous dividend, profitability and firm size exerted significant positive influence on dividend payout while firm leverage and business risk exerted significant negative influence on dividend payout. Surprisingly, firm liquidity, Taxes and Retained Earnings failed to explain the variation in dividend payout of these firms. This, therefore, suggest the need to pursue policies that would minimize investment in risky projects, foster dividend payment through the reduction in retained earnings and enhancing firm’s profitability through tax reduction, exemption and rebate as well as discouraging excessive leverage as the way out

    Keywords:

    Agro-based firms, Dividend payout and liquidity.

    Jel Code:

    N5, G33

    Article Type:

    Research Paper

    Pages:

    223-231

    Publisher:

    Research Foundation for Humanity (RFH)


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