Control of Shareholders’ Wealth Maximization in Nigeria

Abstract

This research focuses on who controls shareholder’s wealth maximization and how does this affect firm’s performance in publicly quoted non-financial companies in Nigeria. The shareholder fund was the dependent while explanatory variables were firm size (proxied by log of turnover), retained earning (representing management control) and dividend payment (representing measure of shareholders control). The data used for this study were obtained from the Nigerian Stock Exchange [NSE] fact book and the annual reports of the six sampled companies from Food/ Beverages and tobacco sub-sector for twenty years (1986-2005) to constitute pooled data of 120 observations. Using auto-regression technique for correcting serial auto-correlation in time series data, the results converge at ten iterations. Results showed that all the independent variables provide good explanation for the model. It was observed that firm size (log of turnover) and retained earnings had positive relationships and statistically significant impacts on the shareholders fund while dividend payment had negative relationship. The results show that turnover and retained earnings are of more significance in the control of shareholders wealth than the dividend payment. Thus, we can conclude that the management of the organizations under the present study is in major control of shareholders wealth maximization objective and impact on the firm performance. Implication is that selecting high quality management for the organizations would help in achieving shareholders wealth maximization objective in organizations.

Corporate governance reforms and shareholders’ confidence in emerging markets

“…Firms' size showed a significant positive association with share market price before and after enactment of the code. Consistent with previous literature, the findings indicate that shareholders express confidence in large firms due to their potential for showing resistance to economic and financial turbulent (Hahn and Lasfer, 2015;Lama et al, 2012;Oladipupo and Okafor, 2005).…”

“…Therefore, it could not capture any statistical significance in the regression estimation (Gujarati, 1995;Tariq and Abbas, 2013). Regarding firms' size, the findings indicate that shareholders express more confidence in large firms (Hahn and Lasfer, 2015;Lama et al, 2012;Oladipupo and Okafor, 2005). Besides contributing to the scarce and incongruent literature in pre-context and post-context of CG regulations (Owusu et al, 2012), the findings of the study also provide important insights for further improvement of the policy and practice in emerging markets like Malaysia.…”

The Impact of Dividend Policy on Shareholders’ Wealth before and After Financial Melt down: Evidence from FMCG Sector in India

“…Several studies were made in relation to dividend policy (DP) and shareholders' wealth (SW) in the developed as well as in the developing countries. Olandipupo andOkafor (2011), Devaki andKamalaveni (2012), Gul et al (2012), Onwumere et al (2012), Salman (2013), Bawa and Kaur (2013), Azhagaiah and Sabaripriya (2008), Tahir and Raja (2014), Atiyet (2012), Chidinma et al (2013), Kumaresan (2014), Uwuigbe et al (2012) and Parua and Gupta (2009) investigated the impact of DP on SW applying OLS method of regression. Azhagaiah and Veeramuthu (2010) analysed the impact of firm size on dividend behavior with the help of Chow-test.…”

“…Researchers have used regression, independent sample t-test, correlation, Granger Causality Test, ADF, and White -Heteroskedasticity Test to study the impact of the DP on SW. Olandipupo and Okafor (2011), in their research work titled "Control of share wealth maximization in Nigeria" focused on parties controlling shareholders' wealth maximization and the ways it affects the firm's performance. The data used for the study were collected from the Nigerian stock exchange and the annual reports of six sample firms from food / tobacco and…”

Accounting Information Disclosure and Dividend Payout of Listed Pharmaceutical Firm in Nigeria

“…Dividend policy is a statement which guides the payment or the appropriation of profit between a firm and its residual owners. It is a statement which clarifies the proportion of profit that should be paid out as a dividend to shareholders taking cognizance of the organization's environment and the expectations of the shareholders (Oladipupo, 2017). According to Baker (2019), dividend policy is a statement that compromises the two extremes of zero percent dividend (retain all) and hundred percent dividend (pay-out all).…”