The relatioship between ownership concentration and dividend smoothing at the Nairobi Securities Exchange
The objective of the study was to establish whether a relationship existed between ownership concentration and dividend smoothing for firms listed at the NSE. A descriptive research design was used. A census of the sixty four listed firms as at 31st December 2014 was taken. The selection criteria used was that the firms should have been listed for at least four years and also should have been paying dividends for the four years. Thirty one firms qualified the selection criteria. Secondary data from the NSE was used. Firms were classified on per sector basis. For each sector, the mean dividend smoothing, ownership concentration, firm’s size and net asset value per sector were computed. Data was analyzed using the SPSS package to establish associations, significance and relationships. The association between dividend smoothing and ownership concentration showed a negative relationship. While the significant tests showed significant relationship. The coefficient of determination value shows that over 90% of the variations in dividend smoothing were explained by the model. However the overall model was not fit for the data. Dividend smoothing was found to be a new concept in the developing economies stock exchanges. The dividend smoothing models are rarely used to establish dividend payout levels. The use of dividend smoothing knowledge is recommended.