Dividend Policy and Shareholder Wealth in Nigerian Listed Companies: Navigating Economic Volatility and Regulatory Constraints.

Abstract

This study examines how dividend policies shape shareholder wealth in Nigerian listed companies amid intersecting challenges of economic volatility, regulatory constraints, and cultural expectations. Employing a mixed-methods approach, we analyze financial data from 50 Nigerian Stock Exchange-listed firms (2015–2023)—stratified across banking, manufacturing, and telecom sectors—and qualitative insights from semi-structured interviews with 15 CFOs and institutional investors. Key findings reveal that consistent dividend payouts drive shareholder returns (18% higher annualized returns for stable payers; β = 0.41, *p* < 0.01 in banking), yet macroeconomic instability—particularly forex scarcity (β = -0.73, *p* < 0.01) and inflation averaging 15.4%— erodes real value. Regulatory compliance (e.g., CAM Act profit mandates) and cultural norms for high payouts dominate firm-level decisions, often overriding profitability. The study advances a *Volatility-Adaptive Dividend Framework*, proposing hybrid models (e.g., forex-linked payouts reducing stock volatility by 22%) and ESG-aligned strategies (e.g., Dangote Cement’s 5% community reinvestment, boosting satisfaction scores by 18 points) to balance liquidity needs and investor expectations. By contextualizing signaling and agency theories to Nigeria’s institutional realities—including weak governance in family firms and retail investor dominance—this research offers actionable strategies: firms should adopt dynamic payout triggers, policymakers must prioritize forex access reforms, and investors ought to discount nominal growth during hyperinflation. While limited by self-reported data, the findings advocate for comparative African