Dividend persistence and sustainable development

Purpose This paper investigates the persistence of dividend policy following an initial public offering (IPO) of non-financial firms in the Gulf Cooperation Council (GCC) countries during the period 2000 to 2019. We also examine whether persistent dividend contributes to a firm's sustainability. Design/methodology/approach We employ various regression models for the main analysis and a series of robustness checks using Tobit model, alternative measure of dependent variable and accounting for firm heterogeneity, endogeneity using GMM and survivorship bias. Findings The results confirm that non-financial GCC firms maintain a persistent dividend policy from their IPO year onwards, aligning more closely with imprinting theory than life cycle theory. This persistence is more pronounced among larger firms and those with higher profitability, which have greater capacity to sustain a stable dividend policy. The results also indicate that dividend policy persistence is influenced by macroeconomic conditions such as financial crises and oil price declines. Finally, the results indicate that dividend policy has a positive impact on environmental, social, and governance (ESG) score. Practical implications We argue that persistent dividends can have implications for sustainable development through signaling managerial commitment, reducing investor uncertainty and supporting long-term value orientation. Originality/value This paper provides new evidence on post-IPO dividend policy persistence in emerging markets, contributing to the limited literature on the GCC context. It also links dividend policy behavior to broader sustainable development objectives.