The Mediating Role of Dividend Policy in the Relationship between Board Diversity and Firm Value: Evidence from Nigeria

This study investigates the mediating role of Dividend Policy in the relationship between Board Diversity (gender, age, educational, and ethnic diversity) and Firm Value (measured by Tobin's Q) among publicly listed firms in Nigeria. Using a sample of 636 firm-year observations, we analyze the direct and indirect effects of various dimensions of board diversity on firm value. The findings indicate that Board Gender Diversity and Educational Diversity have significant positive effects on firm value, while Age and Ethnic Diversity exhibit negative or insignificant impacts. However, the study finds no significant mediating effect of dividend policy in the diversity-firm value relationship. These results highlight the importance of fostering gender and educational diversity in corporate governance to enhance firm performance. The study concludes that dividend policy does not act as a critical channel through which board diversity influences firm value. Recommendations for future research include exploring other mediating factors and considering industry-specific and cross-country analyses to provide broader insights.