Commerce and Management
Permanent URI for this communityhttp://repository.kln.ac.lk/handle/123456789/140
Browse
19 results
Search Results
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 Corporate Governance Practices and Financial Distress: Empirical Evidence from Listed Companies in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya., 2023) Balagobei, S.; Keerthana, G.The study aims to investigate the impact of corporate governance on financial distress of listed companies in Sri Lanka. Board size, board composition, CEO duality, board meeting, director ownership, and audit committee size are proxies for corporate governance while financial distress is measured by the Altman Z-score. Altman Z-score measures financial distress inversely and bigger the Z-score indicates the smaller the risk of financial distress. Using hundred and eight individual observations of firms listed in Sri Lanka for the period of 2019 to 2021 and employing fixed effects model, the effect of corporate governance practices on financial distress is evaluated. The results from panel data regression analysis reveal that firms having large number of directors on the board have a low likelihood of financial distress of listed companies in Sri Lanka. Furthermore, when a chief executive officer serves as the chairman of the board at a company, the more likely it is that the company will experience financial distress. But, board composition, audit committee size, board meeting and director ownership have not shown any significant impact on financial distress. The current study also provides evidence that firm-specific characteristics such as firm size, leverage and profitability, could be useful as to determining the likelihood of financial distress. The findings may be of prominence to the academic researchers, practitioners, and regulators who are interested in discovering the quality of corporate governance practices in a developing market and its impact on financial distress.Item The Moderating Impact of Financial Performance and Stock Returns on the Relationship Between Corporate Governance and Corporate Value. Evidence from Top-Rated Companies in Sri Lanka’s S&P SL 20 Index(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Abeywickrama, H. W. A. D. S.; Kethmi, G. A. P.Introduction: This research demonstrates how financial performance and stock returns moderate the link between corporate governance and corporate value. The study has been conducted on firms in the S&P SL 20 Index. It addresses how sound governance mechanisms affect firm value, and how stock returns and financial performance either enhance or suppress these impacts. Methodology: The study uses a quantitative research methodology where data from 20 listed firms in the S&P SL 20 index is analyzed over the period 2014 to 2024. To conduct this analysis secondary data from annual and quarterly reports were utilized. The diagnostic test used the Panel data analysis to assess the model's validity. Further, to analyze the moderate effect of stock return and financial performance regression models were developed. Findings: This analysis shows a significant relationship between corporate governance and corporate value, a weakly positive relationship. Stock returns moderate the relationship between better corporate governance and corporate value. Financial performance, which is measured through ROA and ROE also enhances the link between good corporate governance and corporate value. Conclusion: The study supports the importance of proper governance structures in the development of corporate values. The findings are informative for policymakers and investors, calling for efforts to build governance mechanisms in firms while relying on financial indicators and market conditions to increase firm value.Item The Impact of Leverage on the Profitability of Commercial Banks in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Kaushalya, A. P. H.; Liyanage, M. L. D. C. J.Introduction: This study investigates the impact of leverage on profitability in Sri Lanka's licensed commercial banks from 2020 to 2023 (using quarterly data), focusing on indicators such as Degree of Financial Leverage (DFL), Degree of Operating Leverage (DOL), Debt-to-Equity Ratio (DER), and Asset Growth. It aims to understand how excessive leverage, amidst fluctuating economic conditions, might affect both financial stability and profitability. Methodology: This quantitative study analyzes the impact of leverage on the profitability of 10 licensed commercial banks in Sri Lanka from 2020 to 2023 using secondary data from quarterly financial statements. Key leverage variables—Degree of Financial Leverage (DFL), Degree of Operating Leverage (DOL), Debt-to-Equity Ratio (DER), and Asset Growth—are assessed for their relationship with Return on Assets (ROA), which measures profitability. The study employs regression analysis to determine the influence of leverage on profitability, with correlation analysis examining the strength and direction of these relationships. Diagnostic testing ensures the reliability of the regression model by addressing potential issues like multicollinearity and heteroscedasticity. Findings: The overall regression model was found to be statistically insignificant with an R-squared value of 0.0349, indicating a poor fit. Among the independent variables, only DER showed a significant positive relationship with ROA, suggesting that higher debt relative to equity correlates with improved profitability. The other variables, DFL, DOL, and Assets Growth, were not significantly related to ROA. This implies that while DER can be a factor in enhancing profitability. Conclusion: The study concludes that traditional leverage measures, such as DFL and DOL, have no significant impact on bank profitability, while DER shows a marginally positive effect. Asset growth alone does not significantly enhance profitability. Therefore, banks should focus on optimizing their capital structure, improving operational efficiency, and managing assets strategically. Policymakers should promote sustainable leverage and better risk management. Researchers should explore other profitability determinants, and investors should prioritize banks with balanced leverage and effective asset management for sustainable growth.Item Corporate governance and default prediction: a reality test(Applied Economics, 2019) Fernando, J.M.R.; Li, Leon; Hou, Yang (Greg)Default prediction has commanded the attention of researchers for at least 50 years. This paper addresses several testable hypotheses regarding the relations between corporate governance and default prediction. We employ the conventional logistic regression to provide empirical evidence from U.S. default data over the period of 2000 to 2015. Empirical results are consistent with the following notions: First, default firms are associated with high ownership concentration, low shareholder rights, low financial transparency and disclosures, and less board effectiveness. Second, in-sample and out-of-sample tests support the incremental contribution of corporate governance information on default prediction, when compared with the models involving just financial information.Item The Relationship between Board Structure and Firm Performance of Listed Plantation Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Weerakkodi, W.A.S.L.; Sujeewa, G.M.M.This study investigates the relationship between board structure and firm performance in listed plantation companies in Sri Lanka. The main objective of this study is to find out the relationship between board structure and firm performance. This research discusses the role and the importance of boards and how boards affect firm performance and internal corporate governance mechanisms such as board size, board gender diversity, CEO Duality and proportion of independent non-executive directors. Eighteen listed plantation firms were selected as the sample size in the Colombo Stock Exchange for the periods 2011, 2012, 2013, 2014 and 2015. Multiple regression analysis has been employed to analyze the relationship between board structure and firm performance. It indicates that the board size is positively associated with Return on Assets and Return on Equity. However, the results reveal that the separation of the two posts of CEO and chairman has a positive relationship with the firm performance. It means when separate CEO Duality is existed firm performance will increase. The obtained results report that the board gender diversity has no significant relationship with firm performance and proportion of independent non-executive directors show a positive relationship with firm performanceItem Impact of Corporate Governance Practices on Financial Performance: Evidence from Banking Sector in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Nimasha, N.A.D.A.; Thilakarathne, C.R.Corporate governance can be defined as the scheme by which corporations are directed and controlled. The objective of this exploration is to inspect the impact of corporate governance tools on firm performance using data of 12 banks in Sri Lankan banking industry over the period of 2006-2015 based on the 120 observations. This study has used only secondary data and main source of data contain of the annual report of the specific banks. Return on Equity (ROE) is used as reliant on variable to the model. Further Firm Leverage, Firm size, Number of Auditors, Board Independence and Board Size used as independent variables to the model. Researcher placed panel data approach as a way of appraisal. Descriptive statistics, ANOVA and t-test applied on data by using SPSS. Findings are based on Correlation techniques and Regression analysis to test the hypotheses to solve the research problem Based on the observed results, Researcher found that there is a considerable significant impact of corporate governance on Performance of the banking industry in Sri Lanka while recognizing the Negative correlation ship between bank performance with Firm leverage, Firm size and board size and also identifying the significant relationship between Firm size, Number of auditors, board independence and Board size.Item Impact of Audit Committee Characteristics on Financial Performance of Listed Finance Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Dissanayake, W.G.P.K.; Bandara, R.M.S.An audit committee is an operating committee of a company's board of directors and it is a compulsory requirement for Sri Lankan listed companies according to the ‘Code of best practices on corporate governance’ published by the Institute of Chartered Accountants of Sri Lanka and Security and Exchange Commission of Sri Lanka. This study was attempt to find out the relationship between the audit committee characteristics such as Size of the Audit Committee, Independence of the Audit Committee, Audit Committee Meeting Frequency, Financial Literacy of Audit Committee Members and financial performance measured by the Return on Assets and Return on Equity of Sri Lankan finance companies. Twenty listed finance companies were selected as sample for the period of 2012 to 2016. Descriptive statistics, correlation analysis and multiple regression analysis were used to analyze the data. According to the analysis, audit committee independence and audit committee financial literacy showed a significant positive relationship with firms’ financial performance. Audit committee meeting frequency significantly related only with financial performance indicator of ROE. However audit committee size did not have significant relationship with firm performance. The results is beneficial to shareholders and companies’ board to make appropriate decisions about audit committee characteristics to enhance firm financial performancItem Corporate Governance and Firm Performance: Empirical Evidence from Selected Listed Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Dehipegedara, B.A.C.; Sujeewa, G.M.M.Corporate governance practices are very important to the corporates and its impact to the company’s performance is much debated areas. Good corporate governance practices enable to reduce the risk of the investors, to attach more investments and to improve the performance of companies. This study analyzed the current context of corporate governance and firm performance in listed companies in Sri Lanka. Data and other reliable information are taken from the audited financial statements and the governance section of annual reports from each selected companies. The sample was obtained from the “business today top 25 companies 2014- 2015” journal article, for the period from 2010 to 2014. Descriptive statistics, Pearson’s correlation, regression analysis and analysis of variance were applied to analyze the relationship between corporate governance and firm performance. The results shows that there is a positive relationship between corporate governance practices and ROE and ROA, in the Sri Lankan context. And also it was found that the relationship between number of meetings that hold by the companies and board composition with ROE and ROA is negative, and the relationship between Board committees and Board leadership structure with ROA or ROE is Positive. It is concluded that there is a positive relationship between corporate governance and firm performance in listed companies in Sri Lanka. On the other hand, some corporate governance practices were significantly related with firm performance and some other corporate governance practices were insignificantly related with firm performance.Item Impact of Corporate Governance Practice on Firm Financial Performance in Listed Manufacturing Firms in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Dharmarathna, G.V.D.S.The research will focus on the Impact of Corporate Governance practice on Firm financial performance in listed manufacturing firms in Sri Lanka. The study is base on the research question “Do corporate governance practice contribute to firm’s performance significantly in listed manufacturing firms in Sri Lanka”. The main objective of the study is to investigate the impact of corporate governance practices on firm’s performance. Thirty one listed manufacturing firms in Colombo Stock Exchange were selected as sample size for the periods of 2008-2012. Correlation and coefficient is measured the strength and direction of the relationship between two variables. Finding revealed that there is no any relationship between the firm performance among board size and CEO Duality practices. Further findings disclosed that there is a positive relationship between executive compensation disclosure transparency and firm’s performance. Based on analyzed data the study found that there is no any relationship between corporate governance and firm’s performance. This study is recommended that the corporate governance practices should be reviewed in reliable way in Sri Lankan context.