Influences of Dividend Policy on Performance Indicators in Enhancing Firm Performance Growth of Listed Non-Financial Companies on the Ghana Stock Exchange

Abstract

Dividend policy as one of the key financial decisions by management remains controversial to both corporate management, stakeholders and academia. Inconclusive findings on impact of dividend policy on corporate financial performance persists. Whilst previous studies are industry-specific, this study considers the topic from multi-industry non-financial companies’ perspective in emerging markets. It is therefore relevant to understand whether the propositions and conclusions reached on this rather controversial and significant dividend issue is applicable to developing countries and their nascent stock market predictions. Regression model was conducted on 2015-2020 financial data of 14 listed non-financial companies to determine the strength of any relationship between dividend policy, profitability, operating efficiency and performance. The results indicated positive relationships between the variables; especially, dividend payout and performance growth is statistically significant (R=0.745; p-value=0.0045). The findings confirm that dividend policy affects variability in firm profitability and its relevance in all markets; hence, dividend-payout deserves management decision primacy.

Keywords: Dividend policy, Investment decisions, GHSE, Non-financial, Shareholders’ wealth

DOI: 10.7176/RJFA/13-10-05

Publication date:May 31^st 2022