The manufacturing sector was favorable, contributing to Nigeria being perceived more as a state of consumption than production. Despite promoting Nigeria as having the largest market in Africa, the manufacturing sector faced economic slowdowns due to rising business costs, power supply issues, and weak infrastructure. The main issue arises from the low share prices of manufacturing firms in Nigeria compared to other sectors, potentially resulting from inadequate patronage or ineffective trading on the stock market. This lack of effective trading reflects on the firm's value, discouraging investors and highlighting a financial capacity gap hindering productivity. To address this, using earnings and dividends as incentives can attract investors, bolstering capital and driving manufacturing to full capacity. This study investigate the relationship between earnings per share, dividends per share, dividend yield and firm size on share price behaviour of manufacturing firms in Nigeria between 2013 and 2022. The study adopts an ex-post factor research design, while a granger causality test was used. Fifteen (15) manufacturing firms were selected while data were sourced from the selected manufacturing firms financial audited reported. The inferences were made at 5 percent significance. The causality effect of earnings per share, dividends per share, dividend yield and firm size on share price behaviour of manufacturing firms in Nigeria indicate a unidirectional causality from DPS to Lagged Share Prices (LSP). However, the reverse relationship (LSP to DPS) is not statistically significant, indicating that past share prices do not reliably predict future dividend payments. For Dividend Yield (DY) and LSP, a unidirectional causality from DY to LSP was observed, suggesting that changes in DY can predict future stock prices. The study recommended that manufacturing firms in Nigeria should prioritize enhancing the transparency of their earnings reporting. Clear communication and detailed disclosures regarding financial performance can build investor confidence and potentially strengthen the relationship between EPS and share prices.
| Published in | International Journal of Economics, Finance and Management Sciences (Volume 12, Issue 2) |
| DOI | 10.11648/j.ijefm.20241202.12 |
| Page(s) | 54-65 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Corporate Earning, Dividend Pay-out, Share Price, Manufacturing Sector, Causality
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APA Style
Moseri, N. M., Owualah, S. I., Ogbebor, P. I. (2024). Earnings Per Share, Dividends Per Share, Dividend Yield and Firm Size on Share Price Behaviour of Manufacturing Firms in Nigeria: Causal Effect. International Journal of Economics, Finance and Management Sciences, 12(2), 54-65. https://doi.org/10.11648/j.ijefm.20241202.12
ACS Style
Moseri, N. M.; Owualah, S. I.; Ogbebor, P. I. Earnings Per Share, Dividends Per Share, Dividend Yield and Firm Size on Share Price Behaviour of Manufacturing Firms in Nigeria: Causal Effect. Int. J. Econ. Finance Manag. Sci. 2024, 12(2), 54-65. doi: 10.11648/j.ijefm.20241202.12
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Download@article{10.11648/j.ijefm.20241202.12,
author = {Nduka Moses Moseri and Sunday Ikechukwu Owualah and Peter Ifeanyi Ogbebor},
title = {Earnings Per Share, Dividends Per Share, Dividend Yield and Firm Size on Share Price Behaviour of Manufacturing Firms in Nigeria: Causal Effect},
journal = {International Journal of Economics, Finance and Management Sciences},
volume = {12},
number = {2},
pages = {54-65},
doi = {10.11648/j.ijefm.20241202.12},
url = {https://doi.org/10.11648/j.ijefm.20241202.12},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20241202.12},
abstract = {The manufacturing sector was favorable, contributing to Nigeria being perceived more as a state of consumption than production. Despite promoting Nigeria as having the largest market in Africa, the manufacturing sector faced economic slowdowns due to rising business costs, power supply issues, and weak infrastructure. The main issue arises from the low share prices of manufacturing firms in Nigeria compared to other sectors, potentially resulting from inadequate patronage or ineffective trading on the stock market. This lack of effective trading reflects on the firm's value, discouraging investors and highlighting a financial capacity gap hindering productivity. To address this, using earnings and dividends as incentives can attract investors, bolstering capital and driving manufacturing to full capacity. This study investigate the relationship between earnings per share, dividends per share, dividend yield and firm size on share price behaviour of manufacturing firms in Nigeria between 2013 and 2022. The study adopts an ex-post factor research design, while a granger causality test was used. Fifteen (15) manufacturing firms were selected while data were sourced from the selected manufacturing firms financial audited reported. The inferences were made at 5 percent significance. The causality effect of earnings per share, dividends per share, dividend yield and firm size on share price behaviour of manufacturing firms in Nigeria indicate a unidirectional causality from DPS to Lagged Share Prices (LSP). However, the reverse relationship (LSP to DPS) is not statistically significant, indicating that past share prices do not reliably predict future dividend payments. For Dividend Yield (DY) and LSP, a unidirectional causality from DY to LSP was observed, suggesting that changes in DY can predict future stock prices. The study recommended that manufacturing firms in Nigeria should prioritize enhancing the transparency of their earnings reporting. Clear communication and detailed disclosures regarding financial performance can build investor confidence and potentially strengthen the relationship between EPS and share prices.
},
year = {2024}
}
TY - JOUR T1 - Earnings Per Share, Dividends Per Share, Dividend Yield and Firm Size on Share Price Behaviour of Manufacturing Firms in Nigeria: Causal Effect AU - Nduka Moses Moseri AU - Sunday Ikechukwu Owualah AU - Peter Ifeanyi Ogbebor Y1 - 2024/03/20 PY - 2024 N1 - https://doi.org/10.11648/j.ijefm.20241202.12 DO - 10.11648/j.ijefm.20241202.12 T2 - International Journal of Economics, Finance and Management Sciences JF - International Journal of Economics, Finance and Management Sciences JO - International Journal of Economics, Finance and Management Sciences SP - 54 EP - 65 PB - Science Publishing Group SN - 2326-9561 UR - https://doi.org/10.11648/j.ijefm.20241202.12 AB - The manufacturing sector was favorable, contributing to Nigeria being perceived more as a state of consumption than production. Despite promoting Nigeria as having the largest market in Africa, the manufacturing sector faced economic slowdowns due to rising business costs, power supply issues, and weak infrastructure. The main issue arises from the low share prices of manufacturing firms in Nigeria compared to other sectors, potentially resulting from inadequate patronage or ineffective trading on the stock market. This lack of effective trading reflects on the firm's value, discouraging investors and highlighting a financial capacity gap hindering productivity. To address this, using earnings and dividends as incentives can attract investors, bolstering capital and driving manufacturing to full capacity. This study investigate the relationship between earnings per share, dividends per share, dividend yield and firm size on share price behaviour of manufacturing firms in Nigeria between 2013 and 2022. The study adopts an ex-post factor research design, while a granger causality test was used. Fifteen (15) manufacturing firms were selected while data were sourced from the selected manufacturing firms financial audited reported. The inferences were made at 5 percent significance. The causality effect of earnings per share, dividends per share, dividend yield and firm size on share price behaviour of manufacturing firms in Nigeria indicate a unidirectional causality from DPS to Lagged Share Prices (LSP). However, the reverse relationship (LSP to DPS) is not statistically significant, indicating that past share prices do not reliably predict future dividend payments. For Dividend Yield (DY) and LSP, a unidirectional causality from DY to LSP was observed, suggesting that changes in DY can predict future stock prices. The study recommended that manufacturing firms in Nigeria should prioritize enhancing the transparency of their earnings reporting. Clear communication and detailed disclosures regarding financial performance can build investor confidence and potentially strengthen the relationship between EPS and share prices. VL - 12 IS - 2 ER -
Department of Finance, Babcock University, Ilishan-Remo, Nigeria
