Implication of catering theory of dividend: Evidence from financial firms listed on the Nigerian Stock Exchange

The increasing number of non-payers of dividend on the Nigerian Stock Exchange stimulates the interest to reexamine the determinants of payouts decisions in the market.This necessitates seeking alternative explanation for the dividend behavior of firms beyond the traditional determinants that have b...

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Main Authors: Abdulkadir, Rihanat Idowu, Abdullah, Nur Adiana Hiau, Wong, Woei Chyuan
Format: Article
Language:English
Published: IISTE 2014
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Online Access:http://repo.uum.edu.my/15415/1/16226-18611-1-PB.pdf
http://repo.uum.edu.my/15415/
http://iiste.org/Journals/index.php/RJFA/article/view/16226
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Institution: Universiti Utara Malaysia
Language: English
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spelling my.uum.repo.154152016-04-12T06:45:59Z http://repo.uum.edu.my/15415/ Implication of catering theory of dividend: Evidence from financial firms listed on the Nigerian Stock Exchange Abdulkadir, Rihanat Idowu Abdullah, Nur Adiana Hiau Wong, Woei Chyuan HG Finance The increasing number of non-payers of dividend on the Nigerian Stock Exchange stimulates the interest to reexamine the determinants of payouts decisions in the market.This necessitates seeking alternative explanation for the dividend behavior of firms beyond the traditional determinants that have been established overtime.This paper examines the implication of the catering theory of dividend on the Nigerian Stock Exchange.Based on a sample of 386 firm-year observations drawn from 49 financial firms listed on the exchange, the study investigates the role of dividend premium (proxy for catering theory) and other firm level characteristics on dividend payout of the sampled firms. Panel data analysis was conducted using both fixed effect and random effect estimates. Based on the random effect estimates which is preferred by the Hausman test conducted, findings of the study shows that dividend premium have significant positive effect on dividend payout.Thus, indicating support for the catering theory of dividend.However, result indicates further that the theory is not supported during crisis. Findings also revealed that firm level characteristics which include size, profitability, cash flow, and past dividend are significant in explaining dividend payout of the sampled firms. IISTE 2014 Article PeerReviewed application/pdf en cc_by http://repo.uum.edu.my/15415/1/16226-18611-1-PB.pdf Abdulkadir, Rihanat Idowu and Abdullah, Nur Adiana Hiau and Wong, Woei Chyuan (2014) Implication of catering theory of dividend: Evidence from financial firms listed on the Nigerian Stock Exchange. Research Journal of Finance and Accounting, 5 (18). pp. 211-215. ISSN 2222-1697 http://iiste.org/Journals/index.php/RJFA/article/view/16226
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
Abdulkadir, Rihanat Idowu
Abdullah, Nur Adiana Hiau
Wong, Woei Chyuan
Implication of catering theory of dividend: Evidence from financial firms listed on the Nigerian Stock Exchange
description The increasing number of non-payers of dividend on the Nigerian Stock Exchange stimulates the interest to reexamine the determinants of payouts decisions in the market.This necessitates seeking alternative explanation for the dividend behavior of firms beyond the traditional determinants that have been established overtime.This paper examines the implication of the catering theory of dividend on the Nigerian Stock Exchange.Based on a sample of 386 firm-year observations drawn from 49 financial firms listed on the exchange, the study investigates the role of dividend premium (proxy for catering theory) and other firm level characteristics on dividend payout of the sampled firms. Panel data analysis was conducted using both fixed effect and random effect estimates. Based on the random effect estimates which is preferred by the Hausman test conducted, findings of the study shows that dividend premium have significant positive effect on dividend payout.Thus, indicating support for the catering theory of dividend.However, result indicates further that the theory is not supported during crisis. Findings also revealed that firm level characteristics which include size, profitability, cash flow, and past dividend are significant in explaining dividend payout of the sampled firms.
format Article
author Abdulkadir, Rihanat Idowu
Abdullah, Nur Adiana Hiau
Wong, Woei Chyuan
author_facet Abdulkadir, Rihanat Idowu
Abdullah, Nur Adiana Hiau
Wong, Woei Chyuan
author_sort Abdulkadir, Rihanat Idowu
title Implication of catering theory of dividend: Evidence from financial firms listed on the Nigerian Stock Exchange
title_short Implication of catering theory of dividend: Evidence from financial firms listed on the Nigerian Stock Exchange
title_full Implication of catering theory of dividend: Evidence from financial firms listed on the Nigerian Stock Exchange
title_fullStr Implication of catering theory of dividend: Evidence from financial firms listed on the Nigerian Stock Exchange
title_full_unstemmed Implication of catering theory of dividend: Evidence from financial firms listed on the Nigerian Stock Exchange
title_sort implication of catering theory of dividend: evidence from financial firms listed on the nigerian stock exchange
publisher IISTE
publishDate 2014
url http://repo.uum.edu.my/15415/1/16226-18611-1-PB.pdf
http://repo.uum.edu.my/15415/
http://iiste.org/Journals/index.php/RJFA/article/view/16226
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