Dividend Payout by Agricultural Firms in Kenya [An Empirical Analysis of Firms Listed on the Nairobi Security Exchange]
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Date
2014
Authors
Ndede, F.W.S.
Waswa, C. W.
Jagongo, A. O.
Journal Title
Journal ISSN
Volume Title
Publisher
Center for Promoting Ideas, USA
Abstract
Agriculture has been a major source of the country’s food security and a stimulant to off-farm employment yet
agricultural production remained on decline. Most firms in the agricultural sector have performed below
shareholder expectations which have led to shareholder apathy and have contributed to the decline of the rural
economy due essentially to unstable and low dividend payout. This research is an attempt to analyze the
determinants of dividend payout of Kenya Agricultural sector. It also focused on identifying whether various
factors available as per literature influence dividend payout ratio in Agricultural sector in Kenya in existing
scenario or not. Statistical techniques of correlation and regression were used to explore the relationship between
key variables. Thus, the main theme of the study was to identify the various factors that influence the dividend
payout policy decisions of Agricultural firms in Kenya listed on Nairobi Securities exchange. The objective of the
study was achieved by adopting panel data estimation technique using multiple regressions because it is the best
method to use when dealing with micro-units in the economy. Data analysis was carried out using the Statistical
Package for Social Scientists (SPSS) version 17.0. The results show positive relationships between dividend
payout and liquidity and profitability. The results also show negative associations between dividend payout and
firm’s growth, Firm size and leverage. These results are consistent with the prediction by many authors
Description
Article
Keywords
Dividend payout, Agricultural firms, liquidity, profitability, leverage
Citation
International Journal of Business and Social Science Vol. 5, No. 11(1); October 2014