DIVIDEND POLICY AND MARKET PERFORMANCE OF MANUFACTURING FIRMS LISTED ON THE NIGERIAN EXCHANGE GROUP
Abstract
This study examined the effect of dividend policy on the market performance of manufacturing firms listed on the Nigerian Exchange Group. The specific objectives were to investigate the effect of dividend policy on market price per share (MPS) and price earnings ratio (PER) of listed manufacturing firms in Nigeria. The study adopted an ex-post facto research design using secondary data extracted from the financial statements of 56 manufacturing firms listed on the Nigerian Exchange Group for the period 2014 to 2023. Dividend policy was proxied by dividend per share (DPS), dividend payout ratio (DPR), and dividend yield (DYD). Data were analyzed using panel regression analysis with fixed effects model and cluster-robust standard errors to address heteroskedasticity and serial correlation. The findings revealed that DPS had a positive and significant effect on both MPS (β = 27.369, p < 0.01) and PER (β = 0.967, p < 0.01), while DYD had a negative and significant effect on MPS (β = -6.277, p < 0.01). DPR showed no significant effect on either MPS or PER. The adjusted R² values of 80.96% for MPS and 69.16% for PER indicate that dividend policy substantially explains variations in market performance. The F-statistics for both models (F = 396.33, p < 0.01; F = 209.41, p < 0.01) confirmed the joint significance of dividend policy on market performance. The study concluded that dividend policy significantly affects the market performance of listed manufacturing firms in Nigeria. It recommended that managers should review their dividend policies, paying particular attention to dividend per share, while policymakers should create an enabling economic environment that supports sustainable dividend payments and business operations.
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Published in Journal of Management & Corporate Sustainablity
ISSN: 2616 - 1292
This article appears in our peer-reviewed academic journal
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