Dynamic Interactions in the Nexus Among Dividend, Firms’ Investment Behaviour and Value of Selected Quoted Companies in Nigeria (2001–2019)

Abstract

In this article, we investigated the dynamic interactions in the nexus among dividend pay-out policy, investment behaviour and the value of listed companies in Nigeria from 2001 to 2019. Structural vector autoregression modelling framework, was employed as technique of analysis. The study employed annual data of listed firms on the Nigerian Stock Exchange. Data were sourced from the annual reports and accounts of the firms and the fact books published by the Nigerian Stock Exchange. The results revealed that investment policy and market value responded gradually to temporal and permanent shocks in the dividend decisions of companies. The study, therefore, recommended that the reaction of investment policy and the market response to variations in dividend policy were contractionary which could then enhance investment decisions and the market values of quoted companies in Nigeria.