Managerial Bias and Dividend Policy Decisions in Nigeria: Evidence from Listed Firms

This study examines the influence of managerial behavioural biases, specifically overconfidence, optimism, loss aversion, and herding, on dividend policy decisions among listed firms in Nigeria. Using an ex-post facto research design and an unbalanced panel dataset comprising 148 firms listed on the Nigerian Exchange Group (NGX) over the period 2011 to 2025, we employ fixed-effects panel regression with Driscoll-Kraay standard errors to account for heteroskedasticity, autocorrelation, and cross-sectional dependence. After controlling for firm-level attributes (firm size, profitability, leverage, and growth opportunities), corporate governance characteristics (board composition, ownership structure, CEO tenure, and CEO compensation), and macroeconomic conditions (market volatility, industry norms, GDP growth rate, inflation rate, and interest rates), the findings reveal that managerial overconfidence and optimism significantly reduce dividend payout ratios, while loss aversion positively influences dividend payments. Herding behaviour yields a statistically significant but contextually nuanced effect. These results are robust across multiple model specifications and post-estimation diagnostics. The study enriches the behavioural corporate finance literature by offering frontier-market evidence from an economy characterised by institutional frailties, concentrated ownership, and persistent macroeconomic volatility. Practically, the findings carry implications for shareholders, corporate boards, regulators, and policymakers seeking to enhance dividend transparency and minority investor protection in emerging African markets.