ANALYZING THE DYNAMICS OF FIRM SIZE AND INVESTMENT ON DIVIDEND POLICY OF QUOTED FIRMS IN GHANA

Abstract

This work was conducted to determine how firm size, investment, inflation, and government effectiveness influence dividend policies proxy by dividend payout of quoted firms in Ghana. Twenty-two firms in total were sampled for this study and included trading, manufacturing, construction, and mining companies for the period 2011 to 2020. The firms cut across different industries namely telecommunications, consumer goods, constructions, oil and gas, technological companies, consumer services, and manufacturing companies quoted in Ghana. Panel data for all 22 non-financial firms were collected from the financial statement, ratios were calculated to ascertain the measurement of the variables under study. The Generalized Method of Moment was adopted and a multiple regression analysis was performed to determine the impact of the variables on dividend policy proxy by dividend payout ratio. The results of the study indicated that the log of total assets had a negative relationship with dividend policy significant at all conventional levels. Investment and government effectiveness also had a positive relationship with dividend policy. Unfortunately, inflation had an insignificant effect on the dividend payout of quoted firms in Ghana for the period under review.

Keywords

• dividend policy
• firm size
• inflation
• investment
• government effectiveness