Effects of Macroeconomics Variables on the Dividend Payout of Firms Listed at Nairobi Securities Exchange

Abstract

Macroeconomic variable crucial and responsible for deviations in the market. The macroeconomic factors have been changing periodically due to fast-paced globalization and proliferation. Additionally, the government has been formulating countering measures to improve stability of the macroeconomic elements. Additionally, business including commercial banks, among others institution in NSE, prefer a stable and conducive macroeconomic business environment. Consequently, the objective of the study is to assess the effect of macroeconomic variable on the dividend payout of firms listed at NSE. Therefore, the study optimized causal research design as was fundamental in guiding the study on data collection and prudent analysis. It conformed to the research topic and strived to increase accuracy by addressing the research problem. In addition, the researcher, constructed a reliable solution based on detailed and intensive data ranging from 1987-2021. In a nutshell, period chosen gave the most up-to date information, relevant, credible and sufficient dataset. As a result, the completed data was subjected to SPSS for extensive yet rigorous computation to give credible and authentic results. In addition, the soundness of the findings was replicated on the presentation and recommendation. Empirically, the model summary from the extensive calculation delineates R of 0.910. This exemplifies that there is a strong correlation of 91.0% among the variables in this study. The R-Square which is the correlation coefficient implies that 82.8% of deviation in dividend payout versus the microeconomics of firms listed in the Nairobi securities exchange is being triggered by Money Supply, Foreign Exchange, Inflation Rate and GDP Growth rate. As a result, the outcome exemplifies that the model was statistically significant since the significance value 0.000 beneath the P-Value of 0.05. In addition, the inferences present that foreign exchange exhibits a positive and significant relationship with dividend payout of (β=0.317; p=0.0.000< 0.05). Further, the T-Test indicates that the GDP growth rate evokes a positive and insignificant relationship towards DPO (regressed variable) of (β=0.033; p=0.261> 0.05). The results tabulated in 4.7 added that the inflation rate had positive and insignificant relationship with the DPO (regressed variable) as seen by (β=0.009; p=0.501> 0.05). Money supply depicted a positive and significant relationship towards the DPO (regressed variable). This was shown by (β=0.310; p=0.000< 0.05). To wrap-up, autonomous value is negative 0.014 hence meaning whenever all macroeconomics variables are maintained unchanged, the dividend payout was negative 0.046. In consequence, a positive single unit of change in foreign exchange triggers a significant increment in the DPO by 31.7% only when other determinants are held constant. Moreover, a unitary increment of GDP by singular unit, transpires an insignificant increment in the dividend payout by 3.3% whenever all other enablers are kept unchanged. Nevertheless, the solitary increment in the inflation rate translates to non-substantial increment of DPO by 0.9% when all enablers are maintained unchanged. Finally, the addition of solitary unit of money supply is pivotal in triggering 31% increment in the DPO only whenever all other enablers are maintained constant. As a consequence, the study advocates for deep analysis of past-presupposition while digitally-led presupposition due to the current proliferation. Additionally, making informed decision relies squarely on consideration of macroeconomic factors. As a ramification, the examination recommends for informed strategies that enhance business productivity by reaping from risky opportunities