Abstract:
Dividend policy in firms is important for the growth and performance of the company. The major objective of this study is to investigate the impact of dividend policy on the performance of selected listed Ghanaian companies. In addition, the study seeks to examine the impact of the share price on a firm's performance. The research investigates the influence of a firm's liquidity on the firm's performance. Finally, a combination of econometric techniques was applied, including Pooled and Feasible Generalized least square techniques. However, the Fixed-effect approach was used as the main technique after performing the Haussman test over Random effect, Pooled and Feasible Generalized least squares. To examine these objectives in detail based on firm-by-firm; the study also accepted the Seemingly Unrelated regression technique (SURE). Data spanning from 2005 to 2019 on 20 firms were used. The fixed-effect results revealed that dividend policy promotes a firm's performance, and it is collaborated by the other techniques. In addition, both share price and liquidity influence the firm's performance positively, therefore the results are statistically insignificant. On the SURE outcome, the study showed a mixed result with some firms indicating statistically significant positive effects of dividend policy on the firm's performance. This is not different from the firm's liquidity and the firm's share price results. The study, therefore, concluded with some policy recommendations, which include maximizing the firm's value through the pursuance of vigorous dividends policies that lead to the dividend payment. In addition, strategies to increase the firm's liquidity, as well as shares should take a Centre stage the business strategies and policies of the firm.
