Ownership Structure and Dividend Policy of Conglomerate Firms in Nigeria

Dividend policy is considered an integral policy in company decision that can have a big impact on the investors’ reaction. This study examines the effect of ownership structure on the corporate dividend policy in the line with agency context. This study covers the period of ten years (2001-2010), with a sample of eight (8) conglomerate firms, consisting of 80 firm-observations. Data were extracted from the annual reports of the conglomerate firms. The empirical results depict a positive association between dividend pay-out and institutional ownership as well as block-holders ownership, but a negative association with managerial ownership. The results reveal that the higher the institutional and block-holders shareholdings the higher will be the firm dividend pay-out. The result also suggests that dividend policy is used by managers expropriate the shareholders wealth. In line with the result, it is recommended that conglomerate firms in Nigeria should encourage more shareholdings by institutions as well as block-holders to reduce the opportunistic practices through dividend policy. DOI: 10.5901/ajis.2015.v4n2p27