A Test of Agency Theory of Divided Relevance on the Firm Value of Listed Nigerian Deposit Money Bank


  • Bashiru UMORU University of Lagos
  • Babatunde O. OKE University of Lagos
  • Abass A. SHIRO University of Lagos
  • Joy C. IYIEGBUNIWE University of Lagos
  • Kareem A. ARIKEWUYO Southwestern University




The main objective of this study is the agency theory of dividend relevance on the firm value of listed Nigerian
deposit money banks (DMBs) for ten years, 2011–2020. The study used an ex-post facto panel research design.
The data for the study was collected from the published financial statements of sampled banks. The study's
dependent variable is market capitalization, a proxy of firm value, while the independent variables are dividend
payout and agency cost, respectively. The data estimation was conducted using the panel data technique. The
findings showed that the dividend payout and agency cost effects on firm value are positive and negative but
statistically significant and insignificant. In contrast, the joint effects of dividend payout and agency cost on a
firm's value are statistically insignificant. This result implies that dividend payout has a unique effect (direct effect)
on firm value but does not moderate the effect of agency cost on firm value in Nigerian DMBs. This can be
attributed to the unique nature of banks, which may be due to the intense supervision by the regulatory

Keywords: Agency cost, market capitalization, firm value, direct effect, dividend payout



30-06-2023 — Updated on 25-08-2023


How to Cite

UMORU, B. ., O. OKE, B. ., A. SHIRO, A. ., C. IYIEGBUNIWE, J. ., & A. ARIKEWUYO, K. . (2023). A Test of Agency Theory of Divided Relevance on the Firm Value of Listed Nigerian Deposit Money Bank. Journal in Humanities, 12(1). https://doi.org/10.31578/hum.v12i1.519 (Original work published June 30, 2023)