Model Fitting and Mediating Effect of Macroeconomic Factors on the Relationship between Dividend Policy and NSE 20 Share Index in Kenya
##plugins.themes.academic_pro.article.main##
Abstract
In Kenya, the business and macroeconomic environment has shown instability in the recent past. The erratic business atmosphere has made making investments challenging. Investments during the periods ranging from 2009 to 2018 in Kenya have been an uphill task. Kenya has faced dwindling inflation, Gross Domestic Product and unstable interest rates. The global business environment, including recession, is also cited as a possible cause of an unfavourable business environment. The main aim of this study is, therefore, to establish the mediating effect of macroeconomic factors on the relationship between dividend policy and the NSE 20 Share Index using regression models and Structural Equation Modelling. The specific objective of this study is to fit mediating models and identify the stability of the fitted models. Model fit, and stability are essential data checks in quantitative research. Results revealed that macroeconomic factors mediate the relationship between dividend policy and stock return, and models revealed model fit, and all of them showed stability. The study is essential for investors, policymakers such as regulators and the government, scholars and the public.