Dividend policy after the IPO: Evidence from Bahrain

The debate on whether the dividend policy is persistent has never stopped. In this paper we examine the persistence of the dividend policy of Bahraini listed non-financial firms by tracking them from when they did an initial public offering onwards during the period 2002- 2014. Using various regression models, the results of the study show that the firms' dividend decision at the date of initial public has a significant positive impact on the dividend policy of the consecutive years. This finding confirms the firm's dividend policy at the initial public offering year is considered to be persistent and has impacted the following years' dividend policy as firms tend to smooth their level of dividend paid. The study results also indicate that both investment opportunities and earnings per share have a positive significant impact on the firms' dividend policy.