13th Students’ Research Symposium 2023/2024
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Item The Effect of Financial Literacy on Firm Performance Through Mediation of Financial Access and Financial Risk Attitude: Evidence from Selected Trading MSME in Ratnapura District(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Witharama, Y. W. K. M.; Weligamage, S. S.Introduction: Micro, Small and Medium Enterprises (MSMEs) are important players in economic development as they provide employment and contribute significantly to the GDP of both developed and developing nations. MSMEs face challenges such as limited financial literacy, limited access to financing and poor risk management skills which at the end results in financial failure of the business. Entrepreneurs who can manage their firms more effectively and make informed decisions have access to increased resources and are more effective at managing risks. This study examines the Effect of Financial Literacy on Firm Performance Through Financial Access and Financial Risk Attitude as Mediators. Methodology: This quantitative and deductive approach was followed, by the positivism philosophy, in an attempt to examine the research problem logically. Primary data were collected from 150 MSMEs using structured questionnaires. Descriptive statistics, correlation analysis, and mediation analysis were conducted using SPSS to evaluate the hypothesized relationships among financial literacy, financial access, financial risk attitude, and firm performance. Findings: The findings indicate a strong positive relationship between the financial literacy of the MSMEs and their performance. Financial literacy was found to have a direct effect on performance and improved the ability to acquire financial resources and positive risk attitudes, which came as partial mediators. MSMEs with more financial knowledge found it easier to obtain funds, manage risks, and deal with market changes and thus made better performance. Conclusion: The analysis demonstrates that targeted policy measures and educational programs on financial literacy should be incorporated into the agenda of MSME owners’ empowerment. Statistics reveal that with better information, entrepreneurs’ judgment is clear, resources are allocated better, and complex financial networks are exploited. Making finance available through efficient and uncomplicated lending and customized financial aid is critical to sustaining liquidity and fostering growth. Also, constructive risk attitudes allow MSME owners to embrace risks and mitigate uncertainties with confidence. These actions are important for establishing a nurturing environment that guarantees the viability and growth of micro, small and medium enterprises in developing countries.Item The Effect of Financial Literacy on Firm Performance through Mediation of Financial Access and Financial Risk Attitude: Evidence from Selected Service MSME in Rathnapura(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Sugathadasa, B. V. S. N.; Weligamage, S. S.Introduction: This study examines how the literacy of businesses in the service sector in the Ratnapura District, Sri Lanka can be related to their performance. Micro, Small and medium-sized enterprises are the engine of the economy and the main providers of jobs, but they face such difficulties as financial management that is not enough and the difficulty in accessing financial resources. Through the use of financial risk attitude, the research gives financial access golden to the mediating roles and it analyses the connection between financial literacy and MSME performance. This study pursues the gaps found in the current literature and gives real-time advice on how the performance of the MSME in the region can be enhanced. Methodology: The study engaged in the quantitative methodology which included the participation of 168 MSME owners and managers from the service sector of the Ratnapura District. The data can be collected as structured questionnaire and analysis was done by using SPSS, a statistical software program. This strict methodology made it possible to derive conclusions that are statistically valid. The research passed through the very specified factors of production; these include; financial literacy, financial access, financial risk attitude, and MSME performance, in which the study placed its major focus on their interactions. Findings: The results demonstrate a clear, and statistically significant correlation between financial knowledge and MSME performance. At the same time, the research has brought out the mediating roles of both financial access and financial risk attitude in this relation. Besides, financial education not only grants a better access to fund, it also brings the creation of the strategy of investment and risk-taking among MSMEs' holders and managers. A calculated mindset, that is; a risk-taking oriented mindset, also creates a strong bond between business activity and excellence. The findings reveal the intricate relations between the performance of MSME, the financial literacy of the individuals, their access to money and of course, their risk-taking approach in the field of maintenance of the infrastructure. Conclusion: This study is beneficial in comprehending the impacts of financial knowledge on the MSME performances in Ratnapura in particular. Consequently, the report underlines the necessity of financial literacy programs with focus subjects and development of special financial instruments for accuracy in satisfying the effects of MSME owners. There is the potential for growth and sustainability for the targeted regions with the guidance of policymakers and financial institutions. Through addressing some of the research open ends, the study presents options for feasible recommendations for MSMEs' prosperity in the service sector that are also valuable to researchers.Item The Effect of Financial Literacy on Firm Performance Thorough Mediation of Financial Access and Financial Risk Attitude: Evidence from Selected Manufacturing MSME in Ratnapura District(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Yatawatta, Y. S. K.; Weligamage, S. S.Introduction: The study assesses the effect of financial literacy on the growth of manufacturing micro, small and medium enterprises (MSMEs) in Ratnapura District, Sri Lanka while examining access to finance and financial risk as mediating variables. This study is based on the premise that MSME sector is critical in the economic development of a nation through employment creation, growth of the Gross Domestic Product (GDP), and investment in innovations. Even with this significance, financial literacy remains an area of concern especially in as far as the ability of MSMEs to have access to formal financial systems and making rational economic decisions is concerned. Methodology: A quantitative methodology was adopted that used a self-administered structured questionnaire designed for 145 MSME owners/managers. Data were analyzed using SPSS with the aid of regression and mediation analysis using Hayes’ Process Macro. Financial literacy, financial access, financial risk attitude and business performance were measured with the use of verified and standardized constructs. Findings: Having knowledge of finance leads to greater business results through more integration into the economy and a more diversified risk attitude. In addition, MSME loans, credit and other financial services are more accessible as financial education enables better risk assessment. Mediation analysis assists in establishing that financial literacy, firm performance and financial access, and financial risk attitude are all closely interrelated in a cause and effect cycle where each is mediating the other. Conclusion: Financial literacy in the case of owners of MSMEs is crucial in increasing their financial inclusion and risk profile therefore improving the success of their businesses. There is need for financial education, also measures to correct the problem of illiteracy should be taken. Other possible mediating variables and frameworks could be investigated in future studies and other geographical areas or sectors could be incorporated.Item Impact of Behavioral Factors on Investment Decisions: Evidence from Western Province Investors in Colombo Stock Exchange (CSE)(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Mendis, H. N. S.; Weligamage, S. S.Introduction: This study investigates the impact of behavioral factors on investment decisions among investors in the Western Province of Sri Lanka, specifically within the Colombo Stock Exchange (CSE). Behavioral finance, which integrates psychological insights into financial decision-making, challenges traditional financial theories that assume rational investor behavior. The primary objective is to examine how behavioural factors (such as representativeness, availability bias, anchoring, overconfidence, loss aversion, framing effects, mental accounting, and regret aversion) influence investment decisions. Methodology: A structured questionnaire was used to collect quantitative data from 100 investors, employing a snowball sampling method. The data were analyzed using exploratory factor analysis, descriptive factor analysis, and regression analysis to identify the relationships between behavioral factors and investment performance. Findings: It reveals that behavioral biases significantly impact investment decisions, leading to systematic errors and suboptimal outcomes. Overconfidence and anchoring biases were found to have a strong influence, while loss aversion and regret aversion also played critical roles in shaping investor behavior. The study concludes that understanding these factors can help improve investor education and decision-making strategies, ultimately contributing to better financial outcomes and market stability. Conclusion: The study concludes that behavioral factors significantly impact investment decisions among investors in the Colombo Stock Exchange (CSE). Key findings include that loss aversion and regret aversion lead to conservative investment practices and suboptimal outcomes. Overconfidence and anchoring biases result in reliance on easily recalled information or historical performance patterns, causing poor future predictions. Mental accounting influences decision-making by categorizing investments into different "buckets." The disposition effect shows that investors sell winning stocks too early and hold onto losing stocks for too long, negatively impacting performance. Understanding and mitigating these biases can improve investor education and decision-making strategies, contributing to better financial outcomes and market stability. The study highlights the need for tailored investor education programs and incorporating behavioral insights into advisory practices.