Abstract:
This study was aimed to identify determinants of dividend payout in Ethiopian private insurance companies. In order to achieve this objective, quantitative research approach was used. Secondary data of ten insurance companies for eleven years period from 2010 to 2020 were used as a panel data for analysis. The study analyzed both internal and macroeconomic variables; profitability, liquidity, leverage, firm size, firm age and growth from internal factors and GDP and inflation from Macroeconomic variables. Random effect model was used to identify the effect of each explanatory variable on the dividend payout of Ethiopian private insurance companies. The result showed that profitability, liquidity and firm size were found significant factors of dividend payout. In contrary to the predictions, the remaining variables-firm age, leverage, growth, GDP and Inflation found to be insignificant. Thus, profitability, liquidity and firm size have positive and significant effect on dividend payout as predicted. Therefore, Ethiopian private insurance company managers should prioritize profitability, liquidity, and firm size when making dividend payout decisions.
