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What influence dividend decisions of firms in Sub-Saharan African?

Author

Listed:
  • Anastacia C. Arko
  • Joshua Abor
  • Charles K.D. Adjasi
  • Mohammed Amidu

Abstract

Purpose - – The purpose of this paper is to examine the determinants of the dividend decisions of firms in Sub-Saharan Africa (SSA). Design/methodology/approach - – The paper applies a two-step estimation procedure using firm-level panel data for firms in selected SSA countries during the period from 1997 to 2007. In the first step the paper employs a probit model to estimate the parameters of the determinants of the decision to pay or not to pay dividends. In the second step the paper estimates the parameters of the dividend payout and dividend per share models by applying the generalised least squares techniques. Findings - – The results provide consistent evidence that dividend decision and its payments are influenced by firm profitability level, investment opportunity sets, taxation, leverage, institutional shareholding and risk. The results affirm the signalling, agency cost and free-cash flow theories of dividend policy. Originality/value - – The main value of this paper is identification of factors that influence dividend decisions of firms in SSA.

Suggested Citation

  • Anastacia C. Arko & Joshua Abor & Charles K.D. Adjasi & Mohammed Amidu, 2014. "What influence dividend decisions of firms in Sub-Saharan African?," Journal of Accounting in Emerging Economies, Emerald Group Publishing Limited, vol. 4(1), pages 57-78, February.
    • Handle: RePEc:eme:jaeepp:jaee-12-2011-0053
    DOI: 10.1108/JAEE-12-2011-0053
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    Citations

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    Cited by:

    1. Noha Said Mohamed Gabr & Rawan Hamed Abd Elkhaliq Mohamed, 2024. "Retained Earnings and Dividends in Real Estate Sector in Egypt," International Real Estate Review, Global Social Science Institute, vol. 27(2), pages 249-274.
    2. Benjamin Amoah, 2024. "The story of dividend payment and corporate cash flow in Ghana," African Development Review, African Development Bank, vol. 36(1), pages 30-40, March.

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