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Nigeria Journal of Management Sciences (NJMS), Benue State University

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Are Earnings and Cash Flows Dividends Smoothing Agent in The Listed Non-Financial Firms in Nigeria?

Maryam Ahmed Jibril: Department of Accounting Kaduna State University


This paper ascertained how determinants (earnings and cash flows) effect dividends smoothing of listed non-financial firms in Nigeria. The paper examined how earnings and cash flows affect dividends policy through smoothing of dividends. Correlation research design was adopted using a cross-section of 10firms for a period of 7 years (2010-2016). Generalized Least Squares (GLS) technique of analysis was used and the study found a significant positive effects of cash flows, current earnings and previous year earnings on dividends smoothing. The study concludes that, listed Nigerian non-financial firms use more earnings and less of current cash flow in dividends smoothing and making changes in dividends policy. Thus, earnings, and cash flows are dividends smoothing agents, and the more they are considered in dividends payout decisions, the higher dividends smoothing. The study recommends that regulators and the board of directors of listed non-financial firms in Nigeria should establish regulations and guidelines on the level and rate of dividends for the listed companies.

Key words: Earnings, Cash Flows, Dividends Smoothing Agent, Listed Non-Financial Firms in Nigeria.

To get access to the full text of this article: Faculty of Management Sciences, Benue State University, Makurdi, Nigeria.

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