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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:An Empirical Analysis of the Relationship between Cash Flow and Dividend Changes in Nigeria
Author:Adelegan, Olatundun JanetISNI
Year:2003
Periodical:African Development Review
Volume:15
Issue:1
Period:June
Pages:35-49
Language:English
Geographic term:Nigeria
Subjects:money
investment returns
Economics and Trade
External link:https://doi.org/10.1111/1467-8268.00061
Abstract:This study reevaluates the incremental information content of cash flows in explaining dividend changes, given earnings. The author carried out an 882 firm-year study by analysing the dividend changes-cash flow relationship on a sample of 63 quoted firms in Nigeria over a period from 1984 to 1997. Despite the fact that he used a wider testing period and more refined cash flow measures than previous studies, he also introduced dummy variables to capture economic policy changes in the economy. The association of cash flows with dividend changes was tested using the modified Lintner-Brittain model as adopted in Charitou and Vafeas (1998) on pooled cross-sectional/time series data from the full sample of observations from 1984-1997. The models were estimated using the ordinary least squares method and the author found a significant relationship between dividend changes and cash flow, unlike previous studies. The empirical results revealed that the relationship between cash flows and dividend changes depend substantially on the level of growth, the capital structure choice, size of each firm and economic policy changes. Bibliogr., sum. [Journal abstract]
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