IDEAS home Printed from https://ideas.repec.org/a/hur/ijarbs/v6y2016i8p100-115.html
   My bibliography  Save this article

The Effect of Board Interest on the Dividend Policy of Nigerian Manufacturing Sector

Author

Listed:
  • I.G. Okafor
  • Ugwuegbe S. Ugochukwu
  • Hillary C. Ezeaku

Abstract

This study investigated the effect of board interest (insider ownership) on dividend payout of the Nigerian manufacturing sector for the period of 2009 to 2015. The data for the study was generated from the annual report of five randomly selected firms from the manufacturing sector in Nigeria economy. The data for this study was analyzed using pooled panel least square model and the result revealed that board interest has a negative and insignificant impact on dividend payout of the firms under consideration. On the other hand the result of the correlation test shows that board interest has a negative relationship with dividend payout. The empirical result also indicates that ownership concentration has a positive but insignificant effect on dividend payout of the Nigerian manufacturing firms. Firm size was found to have a positive and significant effect on dividend payout among Nigerian manufacturing firms. The study suggested that firms in the sector should balance the use of both insider ownership and dividend pay as a tool for managing agency conflict which always result to increased agency cost provided that the choice of tool will not adversely affect the firm’s performance.

Suggested Citation

  • I.G. Okafor & Ugwuegbe S. Ugochukwu & Hillary C. Ezeaku, 2016. "The Effect of Board Interest on the Dividend Policy of Nigerian Manufacturing Sector," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(8), pages 100-115, August.
  • Handle: RePEc:hur:ijarbs:v:6:y:2016:i:8:p:100-115
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/The_Effect_of_Board_Interest_on_the_Dividend_Policy_of_Nigerian_Manufacturing_Sector.pdf
    Download Restriction: no

    File URL: http://hrmars.com/hrmars_papers/The_Effect_of_Board_Interest_on_the_Dividend_Policy_of_Nigerian_Manufacturing_Sector.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Attiya Y. Javid & Robina Iqbal, 2008. "Ownership Concentration, Corporate Governance and Firm Performance: Evidence from Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 643-659.
    2. Benjamin Balsmeier & Dirk Czarnitzki, 2017. "Ownership Concentration, Institutional Development and Firm Performance in Central and Eastern Europe," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(2), pages 178-192, March.
    3. Claessens, Stijn & Djankov, Simeon, 1999. "Ownership Concentration and Corporate Performance in the Czech Republic," Journal of Comparative Economics, Elsevier, vol. 27(3), pages 498-513, September.
    4. Irena Grosfeld, 2006. "Ownership concentration and firm performance: Evidence from an emerging market," Working Papers halshs-00590485, HAL.
    5. Irena Grosfeld, 2006. "Ownership concentration & firm performance: Evidence from an emerging market," William Davidson Institute Working Papers Series wp834, William Davidson Institute at the University of Michigan.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ahsan Akbar, 2015. "The role of corporate governance mechanism in optimizing firm performance: A conceptual model for corporate sector of Pakistan," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 5(6), pages 109-115, June.
    2. Zorica Kalezić, 2015. "Ownership Concentration and Firm Performance in Transition Economies: Evidence from Montenegro," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 4(3), pages 5-64.
    3. Chung, Won Young & Lee, Jae-Gil & Seo, Jaeun & Kim, Jaeyun & Jo, Yuri & Lee, Daeho, 2022. "From whom should ICT startups raise capital? The effect of ownership structure on efficiency in new ICT startups," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 82-91.
    4. Attiya Y. Javid & Robina Iqbal, 2010. "Corporate Governance in Pakistan: Corporate Valuation, Ownership and Financing," PIDE-Working Papers 2010:57, Pakistan Institute of Development Economics.
    5. Jiang, Bing-Bing & LAURENCESON, James & Tang, Kam Ki, 2008. "Share reform and the performance of China's listed companies," China Economic Review, Elsevier, vol. 19(3), pages 489-501, September.
    6. Shahzad Hussain & Syed Muhammad Amir Shah, 2017. "Corporate Governance and Downside Systematic Risk with a Moderating Role of Socio-Political in Pakistan," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 9(4), pages 233-258, December.
    7. Fang-Yi LO & Shih-Kuan CHIU & Pei-Wen SHIH, 2016. "Ownership Concentration, Location, and Internalization Advantage in Financial Performance," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 82-93, September.
    8. Emilia Klepczarek, 2019. "Nadzór korporacyjny a efektywność kosztowa banków notowanych na GPW," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 111-133.
    9. Kashif Rashid & Seep Nadeem, 2014. "The Role of Ownership Concentration, its Types and Firm Performance: A Quantitative Study of Financial Sector in Pakistan," Oeconomics of Knowledge, Saphira Publishing House, vol. 6(2), pages 10-61, June.
    10. Ichiro Iwasaki & Satoshi Mizobata, 2020. "Ownership Concentration and Firm Performance in European Emerging Economies: A Meta-Analysis," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(1), pages 32-67, January.
    11. Bykova, Anna & Molodchik, Mariia & Shamilova, Ekaterina, 2017. "Ownership concentration, corporate governance development and firm performance in Russian listed companies," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 45, pages 50-74.
    12. Cabeza-García, Laura & Gómez-Ansón, Silvia, 2011. "Post-privatisation ownership concentration: Determinants and influence on firm efficiency," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 412-430, September.
    13. John S. Earle & Scott Gehlbach, 2003. "A Spoonful of Sugar: Privatization and Popular Support for Reform in the Czech Republic," Economics and Politics, Wiley Blackwell, vol. 15(1), pages 1-32, March.
    14. Wadim Strielkowski, 2013. "Undeclared Work in the Czech Republic and its Implications for the Czech Labor Market," Central European Business Review, Prague University of Economics and Business, vol. 2013(4), pages 7-14.
    15. Yusuf, Fatima & Yousaf, Amna & Saeed, Abubakr, 2018. "Rethinking agency theory in developing countries: A case study of Pakistan," Accounting forum, Elsevier, vol. 42(4), pages 281-292.
    16. Mukhopadhyay, Jhuma & Chakraborty, Indrani, 2017. "Foreign institutional investment, business groups and firm performance: Evidence from India," Research in International Business and Finance, Elsevier, vol. 39(PA), pages 454-465.
    17. Nandini Gupta & John C. Ham & Jan Svejnar, 2000. "Priorities and Sequencing in Privatization: Theory and Evidence from the Czech Republic," William Davidson Institute Working Papers Series 323, William Davidson Institute at the University of Michigan.
    18. Abdul Waheed & Qaisar Ali Malik, 2021. "Institutional Ownership Board Characteristics and Firm Performance: A Contingent Theoretical Approach," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 12(2), pages 1-15, April.
    19. Hanousek, Jan & Kočenda, Evžen & Mašika, Michal, 2012. "Firm efficiency: Domestic owners, coalitions, and FDI," Economic Systems, Elsevier, vol. 36(4), pages 471-486.
    20. Irena Grosfeld & Iraj Hashi, 2004. "The emergence of large shareholders in mass privatized firms: Evidence from Poland and the Czech Republic," William Davidson Institute Working Papers Series 2004-718, William Davidson Institute at the University of Michigan.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hur:ijarbs:v:6:y:2016:i:8:p:100-115. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/IJARBSS .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.