10th Students' Research Symposium 2021

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The Impact of Risk Management on the Financial Performance of Listed Insurance Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Nishan, K.S.; Fernando, J.M.B.R.
Introduction: Risk, if not adequately managed, can lead to the demise of most businesses, particularly those whose core business is risk management on a day-to-day basis. Risk management should therefore be at the heart of an organization's operations, with risk management techniques integrated throughout the whole organization's processes, systems, and culture. Thus, the goal of this research is to determine the impact of risk management strategies used by Sri Lankan insurance companies on their financial performance. Design/Methodology/Approach: The study employed an exploratory research design, with 28 registered insurance companies in Sri Lanka as the target population. Secondary data was employed in the study. 15 insurance companies were contacted for secondary data. Secondary data was gathered over a six-year period from 2015 to 2020 using published sources as well as data from IRCSL's financial statements. Panel regression analysis was used in the research. Underwriting risk, market risk, liquidity risk, and operational risk were used as proxies for risk management whereas the return on asset is the proxy for financial performance. The firm size was used as a moderating variable and the type of insurance as the control variable. Findings: Underwriting risk, market risk, operational risk showed a significant and positive relationship with the return on assets ratio and the moderating effect of firm size on the relationship between liquidity and financial performance also show a positive and significant impact. Liquidity risk showed a significant negative relationship with the return on assets. Conclusion: The study suggests that Sri Lanka's listed insurance companies should consider reducing their costs and claims through appropriate estimating pricing and valuation techniques. Furthermore, insurance companies should provide sufficient diversification of the insurance policy portfolio in order to earn higher premiums that can cover other losses when they occur. The findings imply that good management of a firm's operations results in lower operating expenses, which leads to an increase in the proportion of net premiums to total assets, which improves a firm's performance. To cut expenses and improve financial performance, insurance companies should employ efficient operations management procedures.
Determinants of Financial Performance of listed Insurance Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Dilrukshi, M.A.A.P.; Chathurika, H.L.D.J.
Introduction: Due to the intangible nature of insurance products and the lack of transparency in the market, the criteria that affect the financial performance of an insurance company are complex. As a result, the financial performance of insurance companies is important to various stakeholders, such as insurers, insurance intermediaries, and policymakers. The purpose of this study is to investigate the factors that determine the financial performance of insurance companies in Sri Lanka. Design/Methodology/Approach: The sample consists of 5 listed insurance companies, including both of life and non-life insurance companies in Sri Lanka, over 2015-2020. The analyses include five variables which internal factors are liquidity ratio, leverage ratio, asset turnover, and external factors are the growth of the economy and interest rate. The financial performance is measured using return on asset (ROA) and return on equity (ROE). Descriptive statistics and regression models were used to analyze the data set through Stata-13 Software. Findings: This study's findings emphasize that there is a significant negative relationship between the liquidity, leverage, and interest rate on return on equity (ROE) of the listed insurance companies in Sri Lanka. In addition to that, asset turnover and growth of the economy have a significant positive relationship between the return on equity (ROE) of the listed insurance companies in Sri Lanka. Conclusion: The managers need to monitor liquidity and leverage internally to achieve higher financial performance while facing external shocks
The Impact of Microfinance on Poverty Alleviation (With Special Reference to Kaluthara District)
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Hansani, R.A.M.; Abeysekera, R.
Introduction: The purpose of this study is to analyse the impact of microfinance on poverty alleviation in the Kalutara district. The study focussed on how loan facility, Saving Facility, Member’s ability and training affect poverty alleviation. Design/Methodology/Approach: To achieve the research objectives, the researcher collected data from 150 customers of microfinance institutes in the Kalutara district. This study used the stratified random sampling technique. Questionnaires were used as the main source of the data collection method in this study. Descriptive Statistics, independent sample T-Test, and ANOVA test were used for data analysis and SPSS was used as statistical software to analyse the survey data. Findings: The findings revealed that factors including loan facility, Saving facility, and Training affect poverty alleviation. Conclusion: This study fills empirical and practical gaps. Microfinance institutions must concentrate on loan facilities, saving facilities, and training to alleviate poverty.
Perceived Risk Factors Affecting Consumers’ Online Insurance Policy Purchase Behavior
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Weerasiri, R.A.U.I.; Chathurika, H.L.D.J.
Introduction: This paper examines the relationship between four factors of consumers’ perceived risk and consumers’ online life insurance policy purchase intentions. Design/Methodology/Approach: A questionnaire was used to collect data, and regression analysis was used to test the hypotheses. A total of 110 respondents have contributed to the survey, and data were quantitatively analysed via IBM SPSS Statistics 23. Findings: The findings suggest that consumers perceived risks when purchasing a life insurance policy online. All the four perceived risk factors have a significant negative influence on consumer online life insurance policy purchase intention. Conclusion: This research gives useful information to insurance companies in online activities and hopes that the findings of this study can help insurance companies to formulate strategies to reduce risks in online purchasing. The development of online shopping has led to some challenges. This issue appears because many insurance companies who do online activities do not understand the main factors contributing to consumers’ perceived risk. Studies on consumers’ perceived risks toward online life insurance policy purchase intentions are still inconclusive. Thus, this paper fills the gap in the research area.
Factors Affecting Clothing Sector Small Scale Business Performance Under Covid 19: Evidence from Colombo District Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Mohamed, M.U.; Gunasekara, H.M.A.L.
Introduction: This study examines factors affecting the small-scale clothing business performance under COVID 19. Design/Methodology/Approach: This study used small clothing business performance as the dependent variable. The price, quality, openness economy and presence of the branded store are used as the independent variables. The Simple and Multiple Linear Regression models were used to analyze the data. Findings: The findings of the study show that the clothing sector small business performance has a negative significant impact on price. The quality has a positive significant impact on the clothing sector small business performance. The Openness economy and the presence of branded store has a negative significant impact on the clothing sector small business performance. Conclusion: The findings of this study show that during COVID 19, the demand for clothing SMEs is elastic. Further, clothing SMEs are threatened by international competition.
Impact of Ownership Structure of Companies on Firm Financial Performance: A Comparative Study of Food Beverages and Tobacco Firms Listed in Colombo Stock Exchange in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Jayaranga, A.A.; Chathurika, H.L.D.J.
Introduction: Foreign direct investment (FDI) is an investment in controlling ownership of a business in one country by a firm operating in another country. This research has been conducted to identify any relationship between foreign direct investments and the firm financial performance of Food Beverages and Tobacco industry firms listed in the Colombo Stock exchange in Sri Lanka. Design/ Methodology/ Approach: The study sample consists of nineteen Food, Beverages and Tobacco companies listed in the Colombo Stock Exchange from 2015 to 2020. Ownership structure measured through the percentage of Non-Resident shareholdings was considered the independent variable, whereas the firm performance measured through return on equity was considered the dependent variable. Firm size, Financial Leverage, Sales Growth, and current ratio were used as the control variables. Descriptive analysis, Correlation analysis, and panel data regression were used to analyze the data in the study. Findings: The results revealed that the ownership structure of firms has an insignificant impact on firm performance. However, results indicate that firm size has a significant negative impact on ROE. But sales growth and financial leverage show a significant positive impact on the performance of listed Food, Beverage and Tobacco firms in Colombo Stock Exchange in Sri Lanka. Conclusion: The results of the study indicate that ownership concentration does not have a significant effect on firm performance of listed firms in the F&B sector in Sri Lanka.
Value Relevance of Accounting Information and Stock Price Reaction of the Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Premathilaka, P.H.G.D.L.; Weerasinghe, W.D.J.D.
Introduction: This research study examines the impact of accounting information on stock prices and find out the relationship between value relevance of accounting information (earning per share, dividend per share, net asset value per share, return on equity) and the share price. Design/Methodology/Approach: The Sample of the study consist with Ninety (90) listed companies from Colombo Stock Exchange and these 90 companies are comprised Finance, Banking, Insurance, Manufacturing and Hotel sector companies. Also, the data was collected over the period of 2011 to 2020 to determine the relationship between the accounting information and share price. Share price is the dependent variable of this study. And mainly used four independent variables. These are Earnings per share, Dividend per share, Net Asset Value per share and Return on Equity. Descriptive Analysis, Correlation Analysis and Regression Analysis methods are used for data analysis. finally, E-Views 11 version software was equipped in this study. Findings: Based on the result of the study among selected variables for the study Earnings per share, Dividend per share, Net asset value per share were shown a significant positive relationship with share price. Return on equity shown negative relationship with share price. Further, all independent variables (EPS, DPS, NAVPS, ROE) are statistically significant with share price. Conclusion: The final result emphasizes that the overall model is statistically significant of all independent variables, and findings support for the shareholders, people who are expect in the companies and the study provided the value of the using of accounting information for a company. Therefore, the study recommended that keep up the consistency of the financial stability of an organization.
Impact of Corporate Governance on The Firm Performance: A Study of Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Peiris, M.A.P.K.; Gunasekara, H.M.A.L.
Introduction: The main objective of this study is to examine whether there is any relationship between corporate governance and the firm performance. Design/Methodology/Approach: This study uses data from 32 companies listed in the Colombo Stock Exchange (CSE) from 2019 to 2020. The Annual Reports of applicable companies in the corresponding year are used to collect data. Board Size, CEO duality and proportion of non-executive directors are considered as the independent variables The dependent variable is the firm performance (EPS, ROA and ROE). The control variables are firm size (SIZE), the number of years a given firm’s stock has been traded on CSE (AGE) and leverage (LEV) of the firm. The analysis is mainly carried out using Multiple Regression. Findings: Regression results show that Board Size is negatively associated with firm performance. Additionally, the attendance of outside directors has a negative impact on the performance. Further, there is a positive relationship between leadership structure and firm performance. Conclusion: Larger Board Size is unfavorable for a company and CEO duality enhances the firm performance.
Impact of Dividend Policy on Firm Value: With Special Reference to Banking Sector
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Hettiarachchi, I.; Fernando, P.N.D.
Introduction: This research study the impact of dividend policy on firm value in Sri Lankan banking sector. Design/Methodology/Approach: The sample of the study consist of highest market capitalization ten banks listed in Colombo Stock Exchange and the data was collected over the period of 2016 to 2020 to determine the impact of dividend policy on firm value in Sri Lankan banking sector. Market value of bank represent the dependent variable of the study and yearly dividend payment of banks represent the independent variables of the study. Panel data regression model is used as is has cross section and time series nature of data. Findings: Based on the results of the analysis among selected variables for the study dividend policy has positive significant relationship with firm value and it derived dividend policy has significant impact on firm value in Sri Lankan banking sector. Conclusion: The finale results of the model derived dividend policy has significant impact on firm value in Sri Lankan banking sector. The findings of the study will guide decision makers of the banks, potential investors, academics and other stakeholders for making their strategic planning, profit allocation and making decisions on managerial implication of banking sector.
The Impact of Board Meetings Frequency on Firm Performance
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Madhushani, W.N.; Gunasekara, H.M.A.L.
Introduction: The purpose of this study is to investigate the impact of Board Meetings Frequency on Firm Performance in capital goods sector firms listed on Colombo Stock Exchange (CSE). Design/Methodology/Approach: Data were collected from 17 capital goods sector firms from 2015 to 2020. Panel Regression has been used as analyzing technique. Board meeting frequency, audit committee meeting frequency, remuneration committee meeting frequency and related party transaction committee meeting frequency were used as independent variables and Return on Assets (ROA) and Return on Equity (ROE) were used as dependent variables. As control variables, Firm size and board size were used. Findings: According to the data analysis, Board meeting frequency shows a marginally significant positive impact on ROA and a positive significant impact on ROE. Related party transaction committee meeting frequency is the only variable that has a significant impact on both ROA and ROE. Conclusion: The study fulfills the existing research gap. Therefore, Board meetings impact on the firm performance after controlling for other effects. Future studies can consider qualiﬁcations and years of service of the board members and ratio of board attendance on the effectiveness of the various committee meetings.
Covid 19 and Financial Performance-Evidence from Companies Listed in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Lakshan, B.T.; Ranjani, R.P.C.
Introduction: The COVID-19 pandemic has had a significant economic impact not only to Sri Lanka but also around the world. One of the effects of the COVID-19 pandemic on Sri Lankan's Gross domestic production (GDP) growth is fall in 16.4% in the second quarter of 2020 once pandemic started to spread in Sri Lanka. (CBSL, 2020). The purpose of this study is to see how the COVID-19 pandemic has affected the financial performance of companies listed in the Colombo Stock Exchange. Design/Methodology/Approach: The sample consists of 143 firms, which are split into fifteen sectors proportionately. The data are collected over 2019/20 financial statements as per before the Covid 19 and 2020/21 financial statements as per during the Covid 19. The variables are profitability ratio, leverage ratio, short-term activity ratio, and liquidity ratio which are used to check whether there is a statistically significant difference between before and during the Covid 19 pandemic. Data are evaluated through the Wilcoxon Singed rank test between two sets of paired data. Findings: Based on the result, there is a statistically significant difference in the profitability of the companies during the Covid 19 pandemics when compared to before Covid 19 pandemics. And leverage ratio, short-term activity ratio, and liquidity ratio are not statistically significant difference with the Covid 19. Conclusion: As per the results of the analysis, Covid 19 pandemic has significantly impacted to the profitability of the companies listed in the Colombo Stock Exchange. There is no significant impact of the Covid 19 pandemic to the leverage, Liquidity, and short-term activity ratio of the companies.
Effect of Financial Literacy on Firm’s Performance of Micro-Enterprises in Sri Lanka (With Special Reference to Gampaha District)
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Madhushani, J.M.N.; Abeysekera, R.
Introduction: The purpose of this study is to determine the relationship between financial literacy and the firm’s performance of micro-enterprises. This study focused on how financial literacy factors such as financial knowledge, financial behaviour and financial attitude affect the firm’s performance of micro-enterprises in Sri Lanka. Design/Methodology/Approach: The quantitative approach was used to carry out the research and data were collected from 150 micro-enterprises located in the Gampaha District. In this study, the main source of the data gathering approach was questionnaires. Descriptive statistics, independent sample T-test, ANOVA test, and multiple regression were used to analyze the survey data using the SPSS software. Findings: The study findings demonstrate that financial knowledge, financial behaviour and financial attitude significantly impact the firm’s performance of the micro-enterprises. The study's adjusted R square is 84.4 per cent which indicates that the financial literacy elements in this study explain 84.4 per cent of financial literacy on a firm’s performance. Conclusion: According to the research findings, financial literacy has a bigger impact on microenterprises’ performance. As a result, the researcher proposes that the efforts be expanded to offer micro-entrepreneurs a higher degree of financial literacy through training and skill development.
Impact of Financial Literacy on Personal Financial Management: Evidence from Government Teachers in Kandy Education Zone, Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Bandara, J.M.U.; Premarathne, W.G.I.D.
Introduction: When existing in a world which is more financially driven rather than more trade driven, the quality of life depends upon the individual’s capacity to manage his/her financial affairs. Compared to industrialized nations, developing countries have a significantly lower financially informed populace. Consequently, financial education programs have risen in popularity. This study aims to examine the impact of financial literacy on personal financial management of government teachers in Kandy zone, Sri Lanka using investments and savings, spending patterns, debt management and retirement planning as the proxies of financial literacy. Design/Methodology/Approach: This study used the quantitative approach through distributing questionnaires to collect data and the random sampling technique was exercised in selecting a sample of 254 government teachers in Kandy zone as respondents. The data was analyzed by using the multiple regression analysis and SPSS software was utilized. Findings: The results of the study were evident enough to prove that financial literacy in all the aspects of savings, investments, spending patterns, debt management and retirement planning shows a positive and a significant impact on personal financial management. Spending patterns showed the highest impact on the personal financial management of teachers. Conclusion: The study findings make a guidance to future researchers to develop other variables that are related to teachers’ personal financial management behaviour. Thus, this study contributes both to the practice and knowledge domain.
A Comparative Evaluation Between the Economic Crisis (2008) and the Covid-19 Impacts in the Stock Market
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Fernando, N.; Piyananda, S.D.P.
Introduction: This study determines the most influenced crisis between the economic crisis (2008) and the COVID-19 pandemic in the share market performance. Design/Methodology/Approach: The study sample consists of six Asian countries, and the data were collected from 2006 to 2008 for the economic crisis and from June 2018 to June 2021 for the COVID-19. This study has been used the positivist research paradigm, deductive approaches, and quantitative research methods to track down the most influenced crisis. Regression analysis (based on the ARIMA model), descriptive analysis, and ARIMA model (for forecasting) were employed to analyze the data. Log returns of each country have been used as the dependent variable, while Lags of the log-returns and dummy variable (Pres-crisis and during the crisis) have been used as the independent variables. Findings: Both crises had shown a negative impact on the share market. However, based on the study results among the two crises, the economic crisis had created a significant negative impact compared to the COVID-19 pandemic. Furthermore, During the economic crisis period (2008), DSEX had shown the highest negative impact where NEPSE in the COVID-19 recession. ASPI is the least affected index during both phases among the six indices. However, according to the ARIMA model, future ASPI returns will be negative. Conclusion: The final result emphasizes that both crises have negatively affected the share market performance while the economic crisis had created the highest impact. Therefore, there is a negative relationship between the crisis and the share market performance.
The Determinants of Life and General Insurance Demand in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Abesekara, M.S.; Perera, L.A.S.
Introduction: The main purpose of this study is to identify how macroeconomic, demographic and socioeconomic factors affect the life and general insurance demand in Sri Lanka and the most significant factors affecting life and general insurance demand in Sri Lanka. Design/Methodology/Approach: Income, education, inflation, urbanization, and finance sector development are used as independent variables and life and general insurance density are the dependent variables of this study. This research uses secondary data, and the sample of this study is the years 2000 to 2019. These data are collected from different sources. analyzing method of this study is multiple regression analysis Findings: income, urbanization has a significant effect on life insurance demand in Sri Lanka. Income, urbanization and finance sector development have a significant effect on the general insurance demand in Sri Lanka. Education, inflation are insignificant for both life and general insurance demand in Sri Lanka. Conclusion: Income level and urbanization have a significant effect on both life and general insurance demand in Sri Lanka. So, increasing income levels and urbanization will be helpful for increase the insurance demand of the country. Also, insurance companies can focus on high-income people and people who live in urban areas to increase their insurance product sales. Developing the finance sector of the country will help develop the general insurance industry of the country.
The Impact of Ownership Concentration on Firm Performance: Evidence from Listed Hotels in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Perera, D.M.M.P.; Ranjani, R.P.C.
Introduction: Ownership concentration is the major internal component in the corporate governance to control the agency issue. The concentration of ownership acts as an invisible hand in improving the firm performance. The purpose of this study is to investigate the impact of ownership concentration on firm performance of listed hotels on Colombo Stock Exchange in Tourism sector in Sri Lanka. Design/Methodology/Approach: The sample of the study consist with twenty-one listed hotels on Colombo Stock Exchange for a time period of 2014 to 2020. The independent variable of ownership concentration measured through percentage of shares held by largest shareholder of the company whereas dependent variable of firm performance was measured through return on asset. Firm size, Financial Leverage & firm age used as the control variables. Descriptive analysis, Correlation analysis and panel data regression used to analyse the data in the study. Findings: The results revealed that ownership concentration has negative insignificant impact on firm performance measured through ROA. However, results indicate that firm age has negative significant impact on ROA. But firm size and financial leverage showed negative insignificant impact on firm performance of listed hotels in Colombo Stock Exchange in Tourism sector of Sri Lanka. Conclusion: The results of the study indicate that ownership concentration does not have significant effect on firm performance of listed hotels in tourism sector of Sri Lanka
An Analysis of Barriers Towards Customer Intention to Use Mobile Banking Service in Sri Lanka: With Special Reference to Galle City
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Maduwanthi, A.M.K.P.; Samarawickrama, A.J.P.
Introduction: This paper provides a summary on the research of an analysis of barriers towards customer intention to use Mobile Banking service in Sri Lanka with special reference to Galle City. The purpose of this paper is to analyse the impact of each barrier (usage barrier, value barrier, risk barrier, traditional barrier and image barrier) on customer intention to use Mobile Banking service. Design/Methodology/Approach: Descriptive research design is used to find out the relationship between barriers and customer intention to use Mobile banking service and research strategy is quantitative. Non- probability purposive sampling method is used, and sample is 250 banking customers in selected 5 licensed commercial banks. Primary data are collected by distributing questionnaire via online and collect data was analysed by using SPSS 23 package. Findings: Hypothesis on tradition barrier, usage barrier, image barrier and risk barrier were supported while only the hypothesis on value barrier was rejected. Conclusion: Tradition barrier, usage barrier, image barrier and risk barrier negatively and significantly impact on customer intention to use mobile banking service excluding value barrier which is insignificant. Mobile banking non- users’ intention to use mobile banking is impacted by these barriers relatively higher level than users’ intention to use mobile banking service in Sri Lanka.
Adoption to E-Banking Services by Banking Customers: With reference to Licensed Commercial Banks in Colombo District
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Subodha, R.A.K.; Weerasinghe, W.D.J.D.
Introduction: This study investigates factors influencing of Adoption of E-banking by Banking Customers in Sri Lanka with special reference to Colombo District. Accordingly, this study aims at examining the impact of subjective norms, the customer attitude and perceived behavioral control towards E banking on customer adoption in Sri Lanka. Design/Methodology/Approach: This study employs descriptive research design techniques in gathering, analyzing, interpreting and presenting the information. Also, study has used convenient sampling technique with a sample of 200 mobile banking users in Colombo district and the data is collected through a questionnaire. Findings: It has resulted a positive significant impact on customer adoption by e banking by Subjective Norms and Perceived Behavioral Control with R square value of 0.572%. The results and the findings of the study shows which variables have impact on customer adoption towards E Banking and how the age has been impacted on adoption towards E Banking in Sri Lanka. Conclusion: This study can be contributed to increase the adoption for E Banking Services in Sri Lanka.
The Impact of Intellectual Capital on Firm Value: A Comparative Study of Consumer Services Companies and Capital Goods Companies Listed in CSE
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Dharmakeerthi, M.M.K.S.; Ranjani, R.P.C.
Introduction: In modern economic era, Intellectual capital is a key competitive advantage for a company. This study was undertaken with the purpose of investigating the impact of Intellectual Capital on Firm value in Consumer Service Sector & Capital Goods Sector companies listed in Colombo Stock Exchange (CSE). Design/Methodology/Approach: This study is for the period of 2015 to 2020 based on the sample of 25 companies in Consumer Service Sector and 20 companies in Capital Goods Sector. Dependent variable for the study was Firm value and independent variable for model 01 was intellectual capital and the independent variables for model 02 were capital employed efficiency, human capital efficiency & structural capital efficiency. Based on the research objectives, the study is tested as two regression models using random effect regression model. Findings: The findings of the study evident that, the intellectual capital has a significant impact on firm value in both consumer service sector and capital goods sector. When consider about component wise impact, capital employed efficiency has a significant impact on firm value and human capital efficiency and structural capital efficiency have not a significant impact on firm value in both sectors. Conclusion: The results conclude that the overall model is statistically significant in both sectors, and there is an impact of intellectual capital on firm value in Consumer Service Sector & Capital Goods Sector in CSE Sri Lanka.
The Impact of off-Balance Sheet Activities on Bank Risks: Evidence from Licensed Commercial Banks of Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Sandamali, H.D.N.; Chathurika, H.L.D.J.
Introduction: Off-Balance Sheet activities (OBS) such as Guarantees and bonds, FX sales and purchases, acceptances, letter of credits, undrawn credit lines, underwriting facilities have become essential income sources for banks. The main objective of this study is to examine the impact of OBS activities on the bank risks of licensed commercial banks in Sri Lanka. Design/Methodology/Approach: The summation of OBS activities is the independent variable, and credit risk, market risk, liquidity risk, capital adequacy risk, leverage risk, and revenue growth risk are the dependent variables. Therefore, six different regressions are conducted. This study is based on secondary data and data were collected from eleven licensed commercial banks for the period 2011-2020. Findings: OBS activities impact on banking risks of licensed commercial banks in Sri Lanka. Further, OBS activities positively impact on liquidity risk, leverage risk and revenue growth risk. But OBS activities do not impact on credit risk, market risk and capital adequacy risk. Conclusion: It was concluded that OBS activities impact bank risks of licensed commercial banks in Sri Lanka. Thus, it is recommended for policymakers to develop appropriate strategies and policies to enhance the performance of the banks through dealing with OBS activities more to generate high income by giving their consideration to relevant risks.