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Determinants of Dividend Policy: Controlling for Political Stability in Pre-crisis, Crisis and Post-Crisis Periods
Current Issue
Volume 5, 2017
Issue 5 (October)
Pages: 58-67   |   Vol. 5, No. 5, October 2017   |   Follow on         
Paper in PDF Downloads: 59   Since Sep. 24, 2017 Views: 1131   Since Sep. 24, 2017
Yusuf Olatunji Oyedeko, Department of Business Administration, Ahmadu Bello University, Zaria, Nigeria.
Yusuf Babatunde Adeneye, Department of Finance, University of Leicester, Leicester, United Kingdom.
The paper examines the factors that influence the dividend policy of Nigerian Deposit Money Banks in the presence of political violence that affects the business environment for the period 2006 to 2015. Correlational research design was adopted. The population of the study comprises all the Deposit Money Banks functioning in Nigeria as at 31 December, 2015 with sample size of 15 Deposit Money Banks listed at the Nigerian Stock Exchange as at 31st December 2015. The data were extracted from the audited financial reports of the banks and the World Bank Development Indicator within the period of the study. The data were analysed through panel data regression. We found that board independence, board size, earnings per share, and non-executive director do not significantly affect dividend per share (DPS) in pre-crisis, crisis and post-crisis periods. The study however revealed that both firm size and political stability significantly affect dividend per share in both pre-crisis and crisis periods but not in the post-crisis period. Political stability has positive effect on DPS in crisis period while a negative effect in pre-crisis period. We also document that the contributing effect of firm size on DPS is higher in crisis period than pre-crisis period. The study documents the dividend policy pattern in the presence of political stability during crisis and non-crisis periods. The study recommended that the management team needs to strive for higher profitability, larger firm size, higher risk premium to satisfy the shareholders’ goal of wealth maximization in the form of higher dividends.
Dividend Policy, Political Stability, Crisis, Deposit Money Banks
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