Financial Performance and Dividend Policy among Firms Listed on the Rwanda Stock Exchange: Evidence from an Emerging African Capital Market
DOI:
https://doi.org/10.31674/ijmhs.2026.v10i02.004Abstract
Background: Dividend policy is a crucial corporate finance decision impacting shareholder wealth, investment decisions, and corporate sustainability. While there are many pieces of research linking financial performance to dividend policy, few empirical studies exist in relation to emerging African stock markets, such as the Rwanda Stock Exchange (RSE). Objectives: The current research evaluates the impact of financial performance on the dividend policy of firms listed at the RSE over the period of 2015–2024. Methods: A quantitative research design was used for analyzing the secondary data collected from eight RSE-listed firms. A balanced panel dataset consisting of 80 firm-year observations was analyzed through the use of descriptive statistics, correlation analysis, diagnostics, and fixed-effects panel regression analysis with robust standard errors. The dividend payout was used as a dependent variable, while ROA, ROE, NPM, and LEV were used as independent variables. Results: It has been found that ROA and LEV have positive coefficient values, while ROE and NPM have negative coefficient values. Nevertheless, the results suggest that none of the variables has a statistically significant effect on dividend payout (p>0.05). Conclusion: The findings suggest that financial performance measures based on accounting reports fail to properly explain the dividend policy decisions of RSE-listed firms. Other factors can also affect the dividend decision process.
Keywords:
Dividend Policy, Financial Performance, Financial Performance Indicators, Fixed-Effects Panel Regression, Rwanda Stock ExchangeDownloads
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