South Asian Journal of Finance

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The Impact of Corporate Governance on Dividend Policy: An Empirical Evidence from Listed Companies in Sri Lanka
(Department of Finance, University of Kelaniya., 2021) Fernando, L. R. D.; Dissanayake, D. H. S. W.; Mendis, M. O. S.
Purpose: This study aims to measure the relationship between corporate governance and dividend policy of Sri Lankan listed companies with the highest market capitalization, using the Agency theory. Methodology: The sample is based on the listed companies with the highest market capitalization at the Colombo Stock Exchange for a four-year period. The independent variables of this research include the board size, board independence, board gender diversity, board meetings, independent directors in audit committee, audit committee meetings, independent directors in remuneration committee and remuneration committee meetings. The dependent variables are dividend per share and dividend payout ratio. Descriptive analysis and Panel regression analysis were conducted to analyze the data. Findings: Independent directors in audit committee and return on assets have a significant positive impact on the dividend policy. Remuneration committee meetings have a significant negative impact on the dividend policy. However, board size, board meetings, board independence, board gender diversity, audit committee meetings, independent directors in remuneration committee, firm size and leverage have no significant impact on the dividend policy. According to the findings, corporate governance has an influence on the dividend policy of the listed companies during the period. Originality: This study fills the research gap in the local context, and this can be recommended for further research, changes in the academic concepts, and modifications in the accepted theories.
Short and Long Term Determinants of Bank Credit Growth in Sri Lanka
(Department of Finance, University of Kelaniya., 2021) Dharmadasa, P. D. C. S.
The Purpose: The aim of this paper is to identify the determinants of credit growth of commercial banks in Sri Lanka during the period from 2008 to 2019. Design/ methodology/approaches: The analysis consists of macro-level data collected from monthly basis including bank-specific, macroeconomic, and monetary policy variables that affect credit growth. Co-integration test is conducted using Autoregressive Distributed Lag (ARDL) approach to determine the long-term determinants of credit growth. Findings: The results revealed that growth of money supply, non-performing loan ratio, lending rate, and inflation rate and efficiency ratio have a strong link with credit growth compared to other bank-specific variables, and therefore they can be considered as long term determinants of commercial banks’ credit growth in Sri Lanka. The findings further revealed that growth of GDP and credit growth tend to have a relationship which supports the ‘demand following’ hypothesis of finance-growth theory. All other bank specific variables indicated marginal impact on the credit growth in the short-run. Policy implications: The results suggested that the government should prioritize all growth promoting policies, because, low economic growth disturbs aggregate demand in the country. To achieve a desired growth, continuation of expansionary monetary and fiscal policies is necessary with a close coordination between them. Continuation of the monetary targeting framework of the CBSL is also necessary since money supply growth influences credit growth in the country. Originality: This research is expected to be a pioneering work in the field as studies focusing especially on credit growth are relatively limited in the Sri Lankan setting.
The Value Relevance of Financial Statements and Stock Price Returns: With Reference to the Companies at Colombo Stock Exchange
(Department of Finance, University of Kelaniya., 2021) Lakmal, S. M. D.; Swarnapali, R. M. N. C.
Purpose: The study aimed to examine whether the financial statements of the listed companies at the Colombo Stock Exchange are value-relevant and what impact they have on stock price returns. Methodology: A model based on red flag ratios that have been proven to be possible fraud indicators of falsified financial statements in various contexts was developed and employed. Furthermore, the accruals quality was measured by discretionary and non-discretionary accruals and estimated using the Modified Jones Model (MJM). Data were collected from a sample of 91 non-financial listed companies in Sri Lanka from 2014 to 2018, and panel regression analysis was utilized to achieve the study objectives. Findings: The majority of the ratios indicated poor financial performance and condition. In contrast, some ratios yielded contradicting results, attesting that financial information disseminated by financial statements of the Sri Lankan context is less value-relevant. The findings revealed that ratios of net profit to total assets and receivables to sales ratios negatively influence stock returns. The ratios of net profits to sales and working capital to total assets, on the other hand, have a positive impact. Moreover, both forms of accruals play a vital role in explaining stock price movements, with non-discretionary accruals becoming increasingly essential. The findings show that earnings variability is determined by both company conditions and managerial interventions, with business conditions appearing to be more critical. Originality / Value: The study contributes to expanding existing literature by investigating the issues of value relevance of financial statements within the Sri Lankan context, incorporating both red flags and accrual components.
Impact of Financial Leverage on Firm Profitability: Evidence from Non-Financial Firms Listed in Colombo Stock Exchange- Sri Lanka
(Department of Finance, University of Kelaniya., 2021) Ravindran, M.; Kengatharan, L.
Purpose: The aim of this research is to find out the impact of financial leverage on firm profitability of the listed non-financial firms in Sri Lanka. Design/Methodology/Approach: Total of 290 companies listed on Colombo Stock Exchange (CSE) is considered as the population and the sampling process excluded Banking, Finance, and Insurance companies as they have identical financial characteristics. The study analyzed 82 non-financial firms listed in CSE from year 2013 to 2017. Debt to equity ratio and liquidity were considered as independent variable. Further, sales growth and firm size were considered as control variables. Return on assets of the firm measures the profitability of the firms and incorporated as dependent variable. The study used panel regression analysis, descriptive tests, and correlation analysis. Findings: Fixed effect model reveals that there is a negative significant impact of financial leverage on return on assets of the non-financial firms listed in CSE. The study elaborates a high influence on return on assets due to the independent variables considered in the study since the R2 value becomes 85.43%. Originality: The review of the literature reveals that there are limited number of studies have been carried out incorporating all the non-financial firms in recent past considering the time period of 2013 - 2017. Therefore, this study would provide more insights including the firms’ performance during these periods. Further, it was identified that there are contradictions in the previous findings. Therefore, the study provides more insights to examine the performance of non-financial firms due to the incorporation of debt capital during the period of 2013 – 2017. Theoretical and Policy implications: M&M 1963, agency cost theories are providing the arguments over the mix of debt-to-equity proportion in the organizational capital structure. This study considers the non-financial firm’s performance according to its capital structure. This can be justified that the operational structure of financial and non-financial firms is significantly different. Therefore, the capital structure incorporation would provide significantly different impacts in between financial and non-financial firms. Therefore, the study adds more value by analyzing only the performance of nonfinancial firms based on its financial leverage. Research limitations/ Future research directions: The study uses only the secondary data and the five-year period from 2013 – 2017. Future studies can be done increasing the sample size and employing different methods such as case studies, that would provide more insights to the findings of this study.
The Effect of Exports and Imports on Exchange Rate over Short and Long Time Horizons: Evidence from Asian Countries
(Department of Finance, University of Kelaniya., 2021) Dissanayake, D. M. U. H.; Kethmi, G. A. P.
Purpose: The purpose of this study is to examine the effect of export and imports on exchange rates. Design/Methodology/Approach: This study includes eighteen Asian countries as the sample for the period of ten years from 2010 to 2019 and analyzed using Autoregressive Lag (ARDL) model. Annual exports and imports of each country are used as the Independent variable along with the dependent variable, real exchange rate. Findings: The results show that the impact of exports on the exchange rate is significant and negative in both short and long run. However, the impact of imports on the exchange rate is significant and negative in short run whereas the effect is significant and positive in the long run. Originality: This study uses Asian countries as the context of the study to examine the effect of exports and imports on real exchange rate. There are a limited number of studies have examined the current debate by covering the entire Asian Region. In examining the relationship between international trade and exchange rate, the majority of the literature investigate the impact of exchange rate on imports and exports whereas; this study contributes to the literature by examining the impact of exports and imports on exchange rate over the short and long-time horizons.
Impact of Non-Interest Income on Bank Efficiency: Evidence from Sri Lanka
(Department of Finance, University of Kelaniya., 2021) Weerasuriya, J. S. P. D. S. B.; Rathnayake, R. M. A. K.
Purpose: To explore the impact of non-traditional activities on both the cost and profit efficiency of banks as the measures of banks’ performance for the context of Sri Lanka. Design/Methodology/Approach: This study has considered systemically important banks in Sri Lanka as the sample and a panel data set for the period 2009 to 2019 obtained from annual reports of the banks. Estimation of bank efficiency was based on Stochastic Frontier Analysis (SFA). The efficiency of banks estimated using Cobb-Douglas and Translog Frontier forms. Findings: The efficiency scores indicate that profit efficiency of banks have decreased due to the involvement in non-traditional activities while the cost efficiency of banks have increased due to the involvement in non-traditional activities. The analysis shows that technology development has a significant impact on profit inefficiency under both cobb-douglas and translog models, while ATM development has only a significant impact on cost inefficiency under translog model when banks engage in both traditional and non-traditional banking activities. Yet, both profit and cost inefficiency of banks does not influence due to the ownership status of banks under the both models. Originality: This study contributes to the extant literature by highlighting the impact of inclusion of non-interest income as the secondary source of banks’ income to the banks’ performance in terms of profit and cost efficiencies as existing literature is silent regarding in this aspect.
Short and Long-term Determinants of Commercial Bank Deposit Growth in an Emerging South Asian Economy: Sri Lanka
(Department of Finance, University of Kelaniya., 2021) Ariyasena, D. L. M. N. K.
Purpose: The purpose of this research is to examine the main factors determining the growth of commercial bank deposits in Sri Lanka for the period 1999 - 2017. Design/Methodology/Approach: The research uses micro and macro level data collected from purposive random basis. The autoregressive distributed lag approach used to determine the significant micro and macro factors of banks deposit growth. Findings: The results show that bank steadiness, the productivity of the banking sector, the large supply of capital, economic growth and inflation are important long-term determinants of deposit growth. The findings additionally show that for bank deposit mobilization, only branch expansion and large money supply are important in the short term. Originality / Value: This study divergent from the extant from the scope empirical studies that focus on the determinants of individual savings behavior in Sri Lanka. The research investigates distinctly how bank characteristics affect deposit growth in view of the short- and long-run time dimensions, thus offering a relatively groundbreaking effort arena. Research Limitations/Future Research Directions – This is based on only for a period of eighteen years and only few determinants have been used for the study due to data availability. However, this study can be extended by using other determents of bank deposits and considering a longer time horizon.
Board Characteristics and Intellectual Capital Disclosures: Evidence from Sri Lanka
(Department of Finance, University of Kelaniya., 2021) Chandraratne, K. A. D. P. M.; Pathirawasam, C.; Mohamed, M. S.
Purpose: The purpose of this study is two-fold. First, to examine the state of intellectual capital disclosures. Second, to investigate the relationship between board characteristics and intellectual capital disclosures. Design: This study selected thirty non-financial listed companies with the highest market capitalization from the Colombo Stock Exchange in Sri Lanka. An intellectual capital disclosure index comprising 61 items was developed to understand the level of intellectual capital disclosure in the selected companies. Panel data analysis techniques were applied to test the proposed hypotheses. Findings: Results indicated that role duality and proportion of female directors have a significant and positive impact on intellectual capital disclosures. Firm leverage was found to have a significant and negative effect on intellectual capital disclosures. Insufficient empirical evidence between other corporate board characteristics and intellectual capital disclosure in Sri Lanka may be attributed to a non-mandatory corporate disclosure environment. Originality: This is among the few studies to examine the link between corporate governance and intellectual capital disclosures employing panel data in Sri Lanka. However, a discourse on the role of corporate governance and corporate disclosures is warranted in a small island developing economy with a fragile financial system like Sri Lanka. Future Research Directions – The study calls for more studies to investigate the relationship between corporate governance and intellectual capital disclosures in the case of Sri Lanka by employing data from different industries for longer periods.
Impact of Financial Literacy Levels among Sri Lankan Investors on Investment Choices
(Department of Finance, University of Kelaniya., 2021) Tennekoon, S. T. M. S.; Liyanage, C.
Purpose: The purpose of this study is to investigate the level of financial literacy among Sri Lankan investors and its impact on investment choices. Design/methodology/approach: The population of this study consisted of the individual investors of Sri Lanka. Accordingly, a sample of 352 responses were obtained through a survey which was conducted using structured self-administered questionnaire. The independent variable of the research is financial literacy with the dependent variable being the investment choice. Multinomial logistic regression was used to test the hypothesis. Findings: The results of the study revealed that the majority of investors in Sri Lanka are having low objective and subjective financial literacy. Further, the results revealed that financial literacy has a statistically significant impact on the current and future choice of different investment products as the main source of investment. Originality: Financial literacy level of individual investors was assessed by using the mean value of the financial literacy score, which has not been commonly used in the Sri Lankan context. This study further contributed to the local body of literature by analyzing the investors’ current main and secondary holdings of seven different
Antecedents of Customer Adoption on Digital Banking with Special Reference to Non-Banking Financial Institutes in Sri Lanka
(Department of Finance, University of Kelaniya., 2021) Madusanka, K. A. E.; Kumari, D. A. T.
Purpose: The principal destinations of this examination are to contemplate and recognize the variables affecting the appropriation of digital banking among non-bank clients in Sri Lanka. Design: A survey was carried out by using structured self-administered questionnaire. As the study is mainly focused on exploring the antecedents of adopting to the digital banking of non-banking organizations of the country, the target population were all the customers who are using digital banking services provided by non-banking organizations in the Sri Lankan context. Accordingly, the sample was based on 300 customers of the digital banking services provided by main players of the industry. The data was analyzed by using descriptive and inferential statistical tools and PLS based SEM was adopted to test the hypotheses. Findings: The researcher has identified the factors; perceived usefulness, perceived ease of use, perceived risk, customer trust, compatibility and information quality affect customer adoption on digital banking among non-bank clients. Originality: The study attempts to distinguish and examine the most significant and practical predecessors that can impact the advanced financial appropriation of non-monetary establishments considering the client's perspective. The study has chosen the TAM model for examining exact discoveries due to its nearby pertinence to the examination question. In view of the chosen model (TAM), however, numerous studies demonstrate that web ease of use, security, data quality, trust, administration quality, comfort, and protection are the main components in the reception of advanced banking by clients.
Factors Affecting Non-Performing Loan in Sri Lanka: A Qualitative Study
(Department of Finance, University of Kelaniya., 2021) Keshani, A. L. A. D.; Jayatilake, L. V. K.
Purpose: Comparison of NBFC’s Non-Performing loan Ratio was given a research problem to the researcher to argue that which factors will be affected to the NPL of high risky non-banking financial company of Sri Lanka as the case study. This study examines the factors affecting non-performing loans of ABC Financed Limited. The objectives were to identify the Institutional relating Factors, Customer relating factors and Remedial Mechanisms of Dealing with Non-Performing Loans. Methodology: The scope of the research was limited to ten (10) Employees of ABC Finance Limited and ten (10) Customers of ABC Financed Limited. The study adopted the general qualitative research methodology using Interpretivism paradigm, Case study strategy and Grounded Theory Approach and in-depth interviews were conducted in order to collect data, and all the interviews were recorded, transcribed and coded. Open coding, selective coding and Axial coding were done in order to get the final framework. Findings: The findings revealed, Customer relating factors also reflect in case of nonperforming loans and there are some new factors were also found as Institutional related factors. Some moderate mechanisms also found to implement for all the financial companies and Banks. Originality / Value: The study contributes to expanding existing literature by investigating the issues of value relevance of financial statements within the Sri Lankan context, incorporating both red flags and accrual components.
Investment Behavior among Accounting / Finance Professionals in Sri Lanka
(Department of Finance, University of Kelaniya., 2022) Alles, L.; Lokeshwara, A.; Liyanage, D. L. N. Y.; Edirisinghe, C. M.; Siriwardhana, P. K. K. H.
Purpose: Investigating investment behavior of rational investors is crucial, as it helps to determine the performance of financial markets and will be more valuable to policymakers and financial providers. This study examines the investment behavior among finance/accounting professionals in Sri Lanka, considering the aspects of socio-economic and demographic factors, financial risk tolerance, concerns, and motives. Methodology: The study was conducted with 150 chartered accountants who are currently residing within Sri Lanka, selected from the “Institute of Chartered Accountants of Sri Lanka” by using simple random sampling. Data was gathered through a questionnaire. The initial data analysis was done through frequencies and Pearson’s correlation, while Ordered Logit Regression was used for further understanding the results and to test the likelihood of outcomes. Findings: Concerns, motives, and financial risk tolerance levels depicted a positive and significant relationship with the investment behavior, whereas demographics and socioeconomic factors show a negative correlation. Originality: The current study focuses on financial professionals who are highly financially literate, and how their investment behavior is influenced, as there were only a few attempts that have been made to address topics relevant to the current study within Sri Lanka considering different respondent samples. However, there were no research studies found out analysing on investment behavior of finance/accounting professionals who can be more rational when taking their investment decisions than normal household individuals. Therefore, this study provides an in-depth analysis addressing these gaps.
Banking Sector Development and Economic Growth in Sri Lanka: An Econometric Analysis
(Department of Finance, University of Kelaniya., 2022) Wijesinghe, M. D. J. W.; Dulanjani, P.
Purpose: This study aims to explore the role of the banking sector in elevating the economic growth of Sri Lanka by identifying the short-run and long-run relationship between banking sector development and economic growth in Sri Lanka. Design/Methodology/Approach: This study uses annual data for the period 1960 to 2019 from World Bank's Global Financial Development Database and World Development Indicators. Odedokun's model, which assumes the causation between financial development to economic growth, is employed using the bound test within the ARDL framework. Findings: The estimated long-term parameter of the banking industry development indicator was found to be positively affected economic growth by supporting supply-led growth model. The estimations of the Error Correction Model provide a broad picture of the short-term relationship, and the results are highly consistent with the results of the long-term model. Granger Causality test found that the banking sector development granger cause to the GDP indicating a unilateral relationship. Originality: This study differs from the existing studies, which focus on the neoclassical one-sector aggregate production model. Financial development is input along with other real sector variables to identify the short-run and long-run relationship with the help of a newly developed econometric approach.
Determinants of Stock Price Volatility: A Literature Review
(Department of Finance, University of Kelaniya., 2022) Hewamana, R.; Siriwardhane, D.; Rathnayake, A.
Purpose: This paper reviews the theoretical background and the empirical results of the stock price volatility determinants under three categories: macroeconomic, company-specific fundamentals, and behavioral factors. Methodology: Previous empirical and theoretical articles on volatility determinants were compared to identify the similarities and differences of the findings. The systematic literature review followed to review the articles published in English between 1930 and 2021. Design: A critical literature review was performed by comparing the findings of previous studies based on the development status of the market. We discuss determinants of stock price volatility. Determinants include behavioral (non-fundamental) factors and macro-economic factors such as GDP, Inflation, Interest Rate, Money Supply, and Exchange Rate. In addition to Earnings and Dividend Payments have been considered under company-specific fundamentals. Findings: It was found that there is no agreement between the studies on the macro-level and micro-level determinants of stock volatility. This empirical inconsistency is substantial in GDP, Inflation, Money Supply, Exchange Rate, Earnings, and Dividend Payments. The interest rate is the only determinant that shows moderate inconclusive empirical results. However, behavioral determinants appear to be significance consistency in determining the stock price volatility. Originality: This article reviews the theoretical and empirical background of stock volatility determinants since there is no single article for reviewing theoretical and empirical results. In a single paper, we provide evidence relating to the impact of macroeconomic, company-specific, and behavioral factors on stock price volatility. Research Directions – Future research is needed to examine the reason for empirical inconsistency in volatility determinants. A systematic literature review is essential.
The Effect of Household Debt on the Stability of the Banking System in Vietnam
(Department of Finance, University of Kelaniya., 2022) Thuong, D. T. H.; Minh, P. T. T.
Purpose: The aim of the study is to examine the impact of household debt on the banking system stability in Vietnam and proposes the policy implications to minimize the impact of household debt on the banking system. Methods: The study uses the method of autoregression (Vector Autoregression) with microlevel and macro-level data from 20 commercial banks to examine the issue. Findings: This study assesses the impact of household debt on the banking system in Vietnam and proposes some policy implications to promote positive effects and limit the negative impacts of household debt on the stability of the banking system in Vietnam. Implications: Policymakers need to perfect the policy framework to reduce the risks of the Vietnamese banking system from excessive household debt. Originality: This study is the first attempt in the Vietnamese context to examine the impact of family household debt on the Vietnamese banking system.
Financial Literacy and Investment Decisions: Evidence from Pakistan
(Department of Finance, University of Kelaniya., 2022) Hussain, A.; Kijkasiwat, P.; Ur Rehman, H. K.; Ullah, M. Z.
Purpose: This study investigates the key factors associated with financial literacy and examines the effect of financial literacy on investment decisions in Pakistan. Design/Methodology/Approach: The 504 samples were collected via a self-administered questionnaire. The study adopts both OLS and logistic regression techniques to analyze the data. Findings: The findings show that the significant factors which increase financial literacy are father education, father income and marital status. However, guardian occupation decreases financial literacy level. Additionally, the results show that financial literacy can enhance investment decisions. Originality/Value: This study is important to policymakers who can consider these statistically significant factors in efforts to enhance financial literacy as well as investment decisions in Pakistan.
Determinants of Non-Performing Loans: Evidence from Sri Lanka
(Department of Finance, University of Kelaniya., 2022) Rathnayake, R. M. S. S.; Dissanayake, D. M. R. U.
Purpose: The increasing trend of non-performing loans in Sri Lanka threatens the banking system. This study attempts to identify the determinants of non-performing loans in licensed commercial banks in Sri Lanka to fill the void in the finance research arena. Methodology: This study is carried out with a sample of eight licensed commercial banks using macroeconomic factors and bank-specific factors: the real interest rate, annual GDP growth rate, annual inflation rate, exchange rate, unemployment rate, the efficiency of the bank, bank size, lending rate, and ROA. Financial data were analyzed for the period of 2008-2018 using panel data regression analysis. Findings: Results show that GDP growth rate, Exchange rate, Unemployment rate, inflation rate, and bank size have a significant effect on non-performing loans in the Sri Lankan banking industry. However, bank efficiency and return on asset (ROA) do not significantly correlate with NPLs. Among these relationships, only the exchange rate shows a positive relationship with the NPL, whereas all other variables show a negative relationship. Implications: According to the study's findings, it is recommended that Sri Lankan commercial banks have their focal point on credit risk management based on maximizing return on its assets while keeping its non-performing loans within acceptable limits.
Stakeholders’ Perception on Auditors’ Role and Its Impact on Audit Expectation Gap with Special Reference to Licensed Commercial Banks in Sri Lanka
(Department of Finance, University of Kelaniya., 2022) Prawanth, S.; Perera, K. H.
Purpose: This study was conducted to understand the stakeholder perception on auditors’ role and its impact on audit expectation gap. Design/Methodology/Approach: A sample of 457 shareholders, employees, customers, and auditors from different licensed commercial banks were selected for the study using the convenience sampling method. Information collected through questionnaires was analyzed using descriptive analysis and Mann Whitney U test. Findings: The study revealed an audit expectation gap between auditors and the shareholders; the auditors and customers; and auditors and employees in the areas of audit responsibility, the usefulness of audited financial statements, audit education, and providing non-assurance services. However, this gap was not significant with regard to audit reliability among auditors and employees. Practical Implication: The main reason behind this gap is the lack of proper education and understanding of the audit standards and audit practices. This gap can be reduced by giving adequate knowledge and awareness of audits to the stakeholders and the users of financial statements in general. Limitations: The study considered the stakeholders of licensed commercial banks in Sri Lanka, whereas there are so many other financial institutions registered under the Central bank of Sri Lanka.
Influence of Behavioral Biases on Investment Decision Making with Moderating Role of Financial Literacy and Risk Attitude: A Study Based on Colombo Stock Exchange
(Department of Finance, University of Kelaniya., 2022) Ranaweera, S. S.; Kawshala, B. A. H.
Purpose: This paper aims to analyze the influence of overconfidence bias and herding bias on investment decision making and the moderating role of financial literacy and risk attitude on overconfidence bias and herding bias on investment decision making in the Colombo Stock Market. Design/Methodology/Approach: This paper collects data from a structured questionnaire survey carried out among 110 individual investors in the Colombo stock market. This paper used a multiple regression method to analyze the influence of overconfidence bias and herding bias on investment decisions with financial literacy and risk attitude as moderating variables. Findings: Overconfidence bias has a significant influence on investment decisions. Results do not indicate that herding bias significantly influence investment decisions. Financial literacy significantly moderates the relationship between overconfidence in investment decisions. However, financial literacy does not significantly moderate the relationship between herding bias in investment decisions. Financial literacy and risk attitude do not significantly moderate the relationship between herding bias in investment decisions. Implications: The findings of this paper would help to understand the influence of behavioral bias on investment decisions of individual investors in Colombo stock market. Originality/Value: The research described in this paper study the moderating role of financial literacy and risk attitude on overconfidence bias and herding bias in making investment decisions (in Colombo Stock Exchange).
The Dilemma of Information Overload: A Review of Literature from Accounting and Finance Related Studies
(Department of Finance, University of Kelaniya., 2022) Regina, A. L. V.; Munasinghe, M. A. T. K.
Purpose: Advancements in information and communication technologies enable the production of a mass amount of data and information. Do more information support quality decision-making? It is a dilemma. The purpose of this study is to address the findings related to information overload and discover potential research gaps. Design/Methodology/Approach: This paper aims to analyze the nature and trends of literature on information overload in the field of accounting and finance from 2017 to 2021 by adopting a systematic literature review approach. As a result of bibliometric analysis from the selected peer-reviewed journals, this paper shed light on 83 research papers for the review process. Findings: The current study finds an increasing trend of studies focusing on information overload issues in corporate reporting. Results portray that since corporate reports are the critical communication bridge between entities and their stakeholders, disseminating unclouded, coherent and transparent information through the reports is very important to facilitate users and decision-makers. Stakeholder perception studies on content, length, and readability of financial and non-financial information disclosures in the annual reports are suggested for future research endeavors. Originality: This study originates the point where the causes of information overload literally become a burden for effective decision-making. Thus, the finding of this study will be useful for both preparers and users of information in managing both financial and noninformation and help future researchers to spot gaps for upcoming research.