IMPACT OF DIVIDEND POLICY ON CORPORATE PERFORMANCE IN NIGERIA

Dividend policy of a firm and how it affects their performance is one of the hottest and debated issues that receive attention of researchers till date. In spite of the growing literatures and empirical findings, there has not been any general conclusion on the extent dividend policy may have influence corporate performance thus this study was carried out to examine the impact of dividend policy on corporate performance in Nigeria. The data for study were collected from the firm annual report/account of the firms under study, covering a period of 17 years;2000-2016. Ex-post factor research design and time series data were adopted, E-view software version7.0 were adopted for the analysis. The study covers two sectors: banking sector(Zenith, First and UBA Plc.), petroleum sector (Oando Plc, Japaul Oil and Maritime Services and Forte Oil Nig. Plc). The ordinary least squares (OLS) regression model was used to estimate the relationship between the dependent variable–return on equity(ROE) and the independent variables-earnings per share (EPS),dividend per share(DPS),dividend payout ratio(DPR) and firm size(FS). The result of the study showed that dividend per share, dividend payout ratio and firm size have significant impact on the performance of banking sector in Nigeria while only earnings per share does not have significant impact on the performance of Nigeria banking sector, but holistically dividend policy have significant impact on the performance of banking sector in Nigeria. Dividend per share and firm size have significant impact on the performance of petroleum sector in Nigeria while earnings per share and dividend payout ratio does not have significant impact on the performance of petroleum sector in Nigeria, but from a general perspective dividend policy have significant impact on the performance of petroleum sector in Nigeria. From the findings, the study concludes that dividend policy has significant impact on banking sector and petroleum sector in Nigeria. The study therefore recommends that managers should act in the best interest of investors as to reduce agency problems, complete information about the dividend policy of the firms should be provided. The study has contributed to knowledge by; investigating how dividend policy affect the performance of firms in Nigeria between 2000- 2016 using time series data approach with E-view software version 7.0. The study suggests that, further research on this topic should use multiple regression model and include new variables. The sample should focus on other sectors and firms.