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International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

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

I.G. Okafor, Ugwuegbe, S. Ugochukwu, Ezeaku Hillary C

http://dx.doi.org/10.6007/IJARBSS/v6-i8/2263

Open access

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.

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