Macro-Economic Factors and Dividend Policy of Non-Financial Quoted Companies in Nigeria

Abstract

Nigeria as a country witnessed serious economic melt-down from the year 2008 which invariably affected the dividend payment ability of the firms since they operate within the macro-economic environment. Hence, this study examined the influence of macro-economic factors on dividend payout of companies in Nigeria. Secondary data was employed for the study. A sample of 50 non-financial listed firms out of the population of 109 non-financial quoted firms were selected using purposive sampling technique. Data on macro-economic factors such as gross domestic product, consumer price index, exchange rate, interest rate and unemployment rate were obtained from the Central Bank of Nigeria's statistical bulletin. The annual reports of the chosen companies for the years 2012 to 2019 were the source of the data on the dividend payout ratio. Ordinary least square and the generalized method of moments were used to analyse data. The results revealed that whereas other variables have a negative impact on dividend policy, macroeconomic factors like GDP and exchange rates have a significant positive impact. Based on this finding, the study concluded that all the macro-economic variables considered in this study are essential when it comes to the decision of Nigerian quoted firms about dividend payout.

Keywords: Dividend, Macro-economic factors, Policy, Quoted Companies, Nigeria

JEL Classifications: G30, M21, P34