Effect of Ownership Structure on Dividend Policy of Listed Deposit Bank in Nigeria

ABSTRACT This study investigates the effect of ownership structure on the dividend policy of listed Deposit Money Banks (DMBs) in Nigeria, specifically focusing on Director’s Ownership Structure, Individual Ownership Structure, and Company Ownership Structure over the period from 2019 to 2023. Utilizing a quantitative research design, the study analyzes a sample of 85 observations, employing statistical techniques such as descriptive statistics, correlation analysis, ordinary least squares (OLS) regression, and diagnostic tests, including the Hausman test, to determine the appropriate model for analysis. The results reveal that Director’s Ownership Structure (DOS) and Individual Ownership Structure (IDOS) do not have a significant impact on the dividend policy of these banks (p-values of 0.334 and 0.9656, respectively), indicating that variations in these ownership structures do not substantially influence dividend payout decisions. Conversely, Company Ownership Structure (COS) demonstrates a significant positive effect on dividend policy (p-value of 0.0434), suggesting that increased corporate ownership correlates with enhanced dividend distributions. The study contributes to the existing literature on dividend policy by highlighting the distinctions in the impact of various ownership types on bank dividend decisions. It recommends that Deposit Money Banks focus on fostering corporate ownership and consider other governance mechanisms over director and individual ownership when determining their dividend policies. Limitations include the restricted scope of ownership factors considered, geographical constraints to Nigeria’s banking sector, and the exclusion of macroeconomic variables. Future research could explore broader ownership categories and incorporate longer timeframes and economic contexts to enrich the understanding of dividend policy dynamics.