Dividend Payments and Share Price Behaviour of Selected Manufacturing Firms in Nigeria
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Date
2024-07-25
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Services for Science and Education – United Kingdom
Abstract
Share price behaviour is affected by information relating to corporate earnings of a
firm which is vital to investors and analysts. The behaviour becomes more
unpredictable when information on dividends payment is made available to the
stock market. Studies have been carried out on the performance of the stock market
but there remains no consensus on the effects of dividend payments on share price
behaviour of listed manufacturing firms in Nigeria. This study adopted ex-post facto
research design involving annual data covering 2013 to 2022 time frame and across
the 14 listed selected manufacturing firms. The data were obtained from Nigeria
Exchange Limited and audited published financial reports of the selected firms. The
study deployed System Generalised Method of Moments (SGMM). Estimates of the
coefficients of the model were evaluated at 5% level of significance. The results
showed that dividend per share had significant positive effect on. In addition,
earnings per share exerted positive and significant effect on share price behaviour.
Furthermore, firm size had positive, but insignificant effect on share price
behaviour. The study concluded that corporate dividend payment is key
determinant of share price behaviour of manufacturing firms listed in Nigeria and
that earnings per share and share price behaviour reinforced each other. Thus, the
study recommended that the management of listed manufacturing firms in Nigeria
should intensify the use of dividends as strategies to attract investors into the sector
in order to reposition themselves as preferred investment destinations.