Commerce and Management
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Item Corporate governance determinants of firm performance: empirical evidence from banking, finance and insurance companies in Sri Lanka(Department of Human Resource Management, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Panditharathna, K. M.This study examines the relationships between corporate governance attributes on firm performance of listed financial sector companies in Sri Lanka. Empirical analysis focused on 56 companies registered in the Colombo Stock Exchange (CSE) covering the industries of banking, finance and insurance for the years 2012, 2013, 2014 and 2015. The study used Ordinary Least Squares (OLS) method to analyze the data. The study finds that relationship between corporate governance and firm performance are not strong. Board size, proportion of independent directors and the proportion of female directors have not significant relationship with performance measures. But board effectiveness has a significant positive relationship with ROE. This study enables to companies to evaluate and restructuring of their board to enhance the performance of the company while contributing to the economic development of the country. Findings of prior study are more focused to the developed countries. This study fills that research gap and contribute to the present literature on corporate governance in the industries of banking finance and insurance.Item The week of the month effect of stock returns: Empirical evidence from the Colombo Stock Exchange(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Perera, M. A. M. M. F.; Madhushani, P. W. G.Introduction: The purpose of this study is to examine the existence of the week-of-the-month effect in the Colombo Stock Exchange (CSE) from 2014 to 2024 while considering the effects of the significant economic event in Sri Lanka that has any impact on the week-of-the-month effect. Methodology: Weekly closing prices of the All Share Price Index (ASPI) were collected from CSE for a sample period of 10 years, from 2014 to 2024. The weekly returns of the ASPI were calculated using the logarithm rerun calculation formula. The study used the Ordinary Least Square Method (OLS), GARCH model and EGARCH model to examine the effect. To explore the best-fitted models, GARCH and EGARCH models were compared using AIC and SIC. Findings: The results of the study revealed that there is a third-week effect in period 01 and a fifth-week effect in period 02 at a 5% significant level. In the full period, there is a negative third-week effect at a 10% significant level and a positive fifth-week return at a 5% significant level. Conclusion: The findings of the study indicate that there is a week-of-the-month effect exists in Period 1, Period 2, and the Full period in CSE. Also, it is highlighted that the Colombo Stock Exchange is not a weak form efficient market since the investors can earn abnormal returns using trading strategies constructed using the historical information of stock prices.Item The Impact of Entity Specific Factors on External Audit Fees of Listed Non-Financial companies in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Arasara, M.H.P.; Kaushalya, M.D.P.Limited liability companies in Sri Lanka are statutorily required to secure the services of an auditor in order to obtain a professional opinion on their financial statements. The usefulness of an external audit in enhancing the credibility of financial statements depends on the quality of audit services being provided. This study sets out to examine the factors that may influence external audit fees paid by the Sri Lankan nonfinancial companies listed on Colombo Stock Exchange (CSE). Specific attention is focused on the investigation of the potential influence of corporate size, profitability, corporate risk, corporate complexity, sector classification, external audit report lag, audit committee independence, status of the audit firm on audit fees. Data used in this study are mainly collected from 2013 until 2017 annual reports published by the Sri Lankan non-financial companies listed on Colombo Stock Exchange. The sample which contains 50 numbers of companies and total observation is 250. Data were analyzed using regression model with an ordinary least squares (OLS) technique over E-Views package. The findings pointed that there is a significant and positive association between audit fees and each of corporate size, company’s profitability, risk and audit committee. A significant and negative relationship has been detected between business complexity and external audit fees. The findings also revealed that audit fees are not significantly associated with, industry type, status of audit firm and audit report lagItem Corporate Governance and Voluntary Disclosure Level: Evidence from Banking and Finance Companies in Sri Lanka.(8th International Conference on Business & Information ICBI – 2017, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2017) Panditharathna, K. M.; Abeywardana, N. L. E.Drawing on the Agency Theory, the main objective of this research is to identify the relationship between corporate governance variables and voluntary disclosure level in banking and finance companies listed in the Colombo Stock Exchange (CSE). Sri Lanka. This study developed a voluntary disclosure index which includes 83 items under 9 sub categories. Through the content analysis for the period between 2012 and 2015 exhaust to gauging the levels of disclosures and panel data analysis used to measure the relationships. Moreover this study used size of the board, proportion of independent directors, and board with female directors and a large audit firm as independent variables and size of the firm, profitability, age and leverage are used as control variables. Empirical results show that independent directors and female directors on the board have significant positive relationships with voluntary disclosures whereas the board size has an insignificant positive relationship with voluntary disclosures and there is a significant negative relationship between voluntary disclosures and corporate governance.Item The Impact of Ownership Structure and Ownership Concentration on Financial Performance of Companies Listed on Colombo Stock Exchange(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Rathnayake, A.R.M.B.I.; Weerathunga, P.R.This study investigates the impact of Ownership Structure and Ownership Concentration on financial performance of Public Companies listed on Colombo Stock Exchange. For this purpose, a sample of 46 top capitalized companies as on 30th August 2016 were selected. Accounting based performance measures of Return on Assets and Return on Equity are used as proxies for financial performance. Ordinary Least Square (OLS) linear Regression model is employed to identify the association between dependent and independent variables. The results of the study reveals that Institutional Ownership, Individual Ownership and Foreign Ownership have not significant impact on financial performance. However, the Ownership Concentration ratios have significant impact on financial performance. All the Ownership Concentration ratios used in this study showed significant impact on the Return on Assets and Return on Equity except the percentage of shares held by first two largest shareholders. This study implies that the majority of the share ownership is held by first five largest shareholders. Therefore, the most of the Sri Lankan companies’ ownership are highly concentrated and it influences to the financial performance.Item Factors Affecting Individual Investment Behavior: A Study of Individual Investors in Colombo Stock Exchange(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Galhena, N.S.; Weligamage, S.Both conventional finance theories and economic theories have been built on the assumption that investors are to be rational in making decisions. However, with the development of behavioral Finance theories which are based on psychology, attempts have been made to understand how the emotions and biases of human can influence investor behavior. Many studies have been conducted in different capital markets all around the world. However, there are limited studies about individual investor behavior in Sri Lankan capital market. This study expected to fill the gap of determining the factors and their level of influence over individual investor’s decision in Colombo stock exchange (CSE) by testing the factors used in other empirical researches in other countries.Primary objective of the study is to explore the variable that can be influenced on behavior of individual investors in CSE. Furthermore, the level of influence of these variables over the behavior of individual investors in CSE is also studied based on five main factors namely, self-image/firm image, accounting information, neutral information, advocate recommendation and personal financial needs. The study begins with the existing theories and studies in behavioral finance, based on which, the main variables are identified. A structured questionnaire has been used in the study covering all identified variables. Data is collected using convenient and snow ball sampling of 200 individual investors in CSE. Data will be analysed through factors analysis. Findings of this study will be useful for individual investors to make decisions, for fund managers and research firms to provide their recommendations to clients.Item The Study on Herd Behavior in Colombo Stock Exchange(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Wijesinghe, D.C.; Weligamage, S.Traditional Finance theory presumed that equity market participants take decisions based on rational platforms. However, recent market incidents witnessed that investor’s decision making process is fueled with irrational behaviors like herding. This study attempts to examine the herd behavior among investors in Colombo Stock Exchange (CSE). During the Civil war time period Colombo bourse significantly impaired investors sentiment and gloomy outlook witnessed. Benchmark Index dragged down by 40% which implies that investors’ sentiment largely weigh on uncertain country’s outlook. Cease of war situation in country which resulted in upliftment in the performances of Colombo Stock exchange and bench mark index surpassed key physiological point barriers. Researchers believed that time interval accurately captured the market fluctuations during the Sri Lanka civil war situation. Thestudy further attempts to detect the herding in bull and bear phrases in market. Long term bull run of CSE tandem with positive sentiment over future aspects of country and improving macroeconomic fundamentals. S& P SL 20 Index which was previously known as Milanka is used as a sample of the study. Daily counter returns of the S& P SL 20 index during the period of 2008-2010 has been gathered for analysis. This Study employed two empirical methods named Cross Sectional Absolute Deviation Return (CSAD) and Cross Sectional Standard deviation (CSSD) Method. All share price index is used as the proxy for market returns and S& P SL 20 individual counter returns used as a market portfolio returns assuming that blue chip counters are quickly respondent to the market moving news effect due to their high liquidity.Item Corporate Governance and Firm Performance(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Panditharathna, K.M.This study examines the relationships between corporate governance attributes on firm performance of listed financial sector companies in Sri Lanka. Empirical analysis focused on 56 companies registered in the Colombo Stock Exchange (CSE) covering the industries of banking, finance and insurance for the years 2012, 2013, 2014 and 2015. The study used Ordinary Least Squares (OLS) method to analyze the data. The study finds that relationship between corporate governance and firm performance are not strong. Board size, proportion of independent directors and the proportion of female directors have not significant relationship with performance measures. But board effectiveness has a significant positive relationship with ROE. This study enables to companies to evaluate and restructuring of their board to enhance the performance of the company while contributing to the economic development of the country. Findings of prior study are more focused to the developed countries. This study fills that research gap and contribute to the present literature on corporate governance in the industries of banking finance and insurance.Item Equity Market Volatility Behavior in Sri Lankan Context(University of Kelaniya, 2015) Morawakage, P.S.; Nimal, P.D.Colombo Stock Exchange (CSE) in Sri Lanka is at its first level of emerging markets. Volatility of emerging markets are considered to be high and characterized by complex features. Therefore, this study focusses on examining the volatility behavior of Colombo Stock Exchange with advanced econometric models. Here GARCH, EGARCH and TGARCH models are used to capture the complex volatility features. It is observed that volatility clustering and leverage effect exists in Colombo Stock Exchange. Further, negative shocks creates more volatility compared to a positive shocks generated in the market. TGARCH model assuming student-t probability distribution function is more suitable to explain the volatility in Colombo Stock Exchange among the models described above according to the Akaike and Schwarz information criteria.Item Effect of credit rating on capital structure: with reference to the listed companies on Colombo stock exchange(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Chathuranga, R.B.N.D.Aim of this study was to investigate whether the credit rating is an important determinant other than the firm's characteristic to obtain optimal capital structure focusing on the research hypothesis that the firms with higher credit along with the other factors (FTOA, ROA and Size) tend to have more debt in their capital structure of firms rated by Fitch Ratings Lanka Ltd. For this research, sample size of 40 observations (2 years data of 20 firms) was taken on the basis of convenience sampling. Secondary data were used for the research and data were collected from Fitch Rating Lanka, Colombo Stock Exchange and Annual reports of the firms. Results obtained by using regression analysis.