Corporate Shareholding Structure and Dividend Payout Ratio of Listed Chemical and Paints Companies in Nigeria

Kabiru Isa Dandago, Musa Adeiza Farouk and Latifat Muhibudeen

Applied Finance and Accounting, 2015, vol. 1, issue 2, 47-54

Abstract: This paper is an empirical analysis of influence of Corporate Shareholdings Structure on Dividend payout ratio of listed Chemical and Paints Companies in Nigeria. The study is for the period of 2008-2013. The listed Chemical and Paints Companies are Eight (8) in number as provided by Nigerian stock exchange factbook for 2013. All the eight firms were used for the study. Corporate Shareholdings Structure was proxy with managerial shareholding, institutional shareholding, block shareholding and foreign shareholdings, while dividend payout ratio was proxy with dividends to net income for the same period. The data were collected from secondary source through the annual reports and accounts of the firm. The study adopted multiple regression technique. The findings revealed that managerial shareholdings has negatively, strongly and significantly impacted on dividend payout ratio of listed Chemical and Paints Companies in Nigeria, while Institutional shareholdings, Foreign shareholdings have positive, strong and significant influence on dividend payout ratio. But block shareholding shows no significant contribution to dividend payout ratio. It is recommended amongst others that the listed Chemical and Paints Companies should increase the number of shares allotted to institutional shareholders and foreign shareholders where investors are only interested in dividend payment as it may serve as a sure means of having increase in payment of dividend to shareholders. But where shareholders are only interested in capital gain rather than dividend payment, the shares held by management should be increased as this will discourage payment of high dividend in favour of capital gain.

Keywords: Dividend payout ratio; corporate shareholdings structure; Bird-in-hand theory; Signaling theory; Agency theory. (search for similar items in EconPapers)
Date: 2015
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