Determinants of Dividend Payout Behaviour of Listed Financial Firms
Abstract
This study investigated the determinants of dividend payout behaviour of listed financial firms in Nigeria. The study utilized and extended the Lintner (1956) model to include other firm specific attributes and macro-economic factors. A sample of 30 financial firms was used for 2012 to 2020. The panel unit root, co-integration test and panel least square were used for data analysis. Empirical findings confirmed the validity of the Lintner model in explaining dividend payout behaviour among listed financial firms in Nigeria. Specifically, past dividend payout and profitability were found to have a significant impact on dividend payout. Other firm specific attributes (taxation, leverage, firm size) and macroeconomic factors (inflation & interest rate) were found not to be significant in explaining dividend payout among listed financial firms in Nigeria. Also, the study found that listed financial firms in the Nigeria Exchange Limited have a high speed of adjustment. Premise on the findings, the study recommended that dividend payment should be smoothed with earnings. Also, managers must ensure earnings sustainability before adjusting to new earnings.
Keywords: Target Dividend, Lintner Theory, Firm-specific Factors, Macroeconomic Factors, Dividend Decision
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© 2022, Centre for Foundation and Interdisciplinary Studies, Baze University, Abuja
Electronic Publication 2022
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