THE EFFECT OF OWNERSHIP STRUCTURE ON DIVIDEND POLICY OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

Abstract

This study investigates the effect of ownership structure on the dividend policy of listed
consumer goods firms in Nigeria. Ownership structure was represented by managerial
ownership and foreign ownership while dividend policy was explained by dividend payout
ratio. Employing panel data from 21 firms spanning from 2014 to 2023, the study utilizes
descriptive statistics, correlation, and multiple regression analysis to examine the effect.
Findings reveal that managerial ownership has an insignificant negative effect on dividend
payout ratio (DPR), suggesting limited influence on dividend decisions. Conversely, foreign
ownership positively and significantly affects DPR, indicating that higher foreign ownership
leads to increased dividend payouts and which reflects foreign investors' preference for regular
returns. Firm size, a control variable, shows a significant positive relationship with DPR,
highlighting the propensity of larger firms to adopt generous dividend policies. The study
underscores the role of ownership dynamics and firm characteristics in shaping dividend policy
and recommends that firms consider foreign investors' preferences and leverage on their size
to enhance shareholder returns. Regulatory frameworks promoting transparency and
shareholder rights are also suggested to foster investor confidence.