THE MODERATING EFFECT OF OWNERSHIP CONCENTRATION ON DIVIDEND PAYMENTS AND FIRM VALUE: THE CASE FOR NAIROBI SECURITIES EXCHANGE

نویسندگان

  • Anthony Muriungi Department of Finance and Accounting, School of Business and Economics, Meru University of Science and Technology, Kenya
  • Kennedy Okiro Department of Finance and Accounting, Faculty of Business and Management Sciences, University of Nairobi, Kenya
  • Herick Ondigo Department of Finance and Accounting, Faculty of Business and Management Sciences, University of Nairobi, Kenya
  • Mary Kinoti Department of Business Administration, Faculty of Business and Management Sciences, University of Nairobi, Kenya

DOI:

https://doi.org/10.46827/ejefr.v9i1.1949

کلمات کلیدی:

ownership concentration, dividend payment, firm value

چکیده

Empirical studies exploring the relationship between dividend policy, ownership concentration, and firm value have presented mixed findings. Several studies have explored this relationship across different contexts and markets, resulting in diverse and sometimes contradictory conclusions. One of the aspects of corporate ownership and management theory that researchers have increasingly focused on is the influence of large shareholders on value-creating metrics. The objective of this paper was to examine the effect of dividend payment on firm value and the moderating effect of ownership concentration on the dividend payment and firm value relationship at the Nairobi Securities Exchange. Dividend signalling and shareholder monitoring hypotheses were the key theories supporting this study. The study utilised longitudinal data for 2008-2017, the target population was sixty-six companies trading securities at the NSE in that period. Empirical results reveal that dividend payment has a positive effect on the firm value, which supports the signalling hypothesis, and ownership concentration negatively moderated the relationship between dividend payment and firm value, this implies that firms with high ownership concentration will not be affected by the changes in the amount of dividends, alternatively, firms with dispersed ownership will be negatively affected if they reduce the amount of dividends. Regular payment of dividends ensures that dominant shareholders don’t disadvantage minority investors. Policymakers should consider stricter regulations and enforcement to ensure that large shareholders do not exploit their control at the expense of minority shareholders. Enhancing investor education and awareness can empower minority shareholders better to understand their rights and the implications of dividend policies. This study recommends that the regulatory body enforce stronger transparency measures to ensure dividends remain an effective signal of firm performance.

JEL: G14; G32; G35

 

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بیوگرافی نویسندگان

  • Anthony Muriungi، Department of Finance and Accounting, School of Business and Economics, Meru University of Science and Technology, Kenya

    Anthony Muriungi, lecturer in the School of Business and Economics at Meru University of Science and Technology Kenya, has research experience in corporate governance and international business, holds a Bachelor’s degree in Economics and Sociology from University of Nairobi (Kenya), a Master’s in Business Administration in international Business from University of Nairobi (Kenya), and is currently pursuing his Ph.D. in Business Administration at the University of Nairobi. Areas of interest are financial markets, entrepreneurship finance, and international business.

  • Kennedy Okiro، Department of Finance and Accounting, Faculty of Business and Management Sciences, University of Nairobi, Kenya

    Dr. Kennedy Okiro, Lecturer, Department of Finance and Accounting, University of Nairobi, Areas of interest: financial markets and institutions, financial management, forensic accounting.

  • Herick Ondigo، Department of Finance and Accounting, Faculty of Business and Management Sciences, University of Nairobi, Kenya

    Dr. Herick Ondigo, Senior Lecturer, Department of Finance and Accounting, University of Nairobi, areas of interest: capital market efficiency, corporate governance, mergers and divestitures, risk management.

  • Mary Kinoti، Department of Business Administration, Faculty of Business and Management Sciences, University of Nairobi, Kenya

    Professor Mary W Kinoti, Associate Professor of Strategic Sales, Marketing and Branding, Faculty of Business and Management Sciences, University of Nairobi, Areas of interest: green marketing, sustainable development and marketing.

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دانلودها

چاپ شده

2025-05-19

شماره

دوره 9 شماره 1 (2025)

نوع مقاله

Articles