Impact of Company Internal Factors on Debt Policy of the Listed Entities in Colombo Stock Exchange

Abstract

Purpose: This study aims to examine the impact of institutional ownership, managerial ownership, free cash flow, asset structure and dividend policy on debt policy of listed firms by also considering the Covid 19 period. Design/Methodology/Approach: This study uses secondary data, that is, the financial reports of main board companies listed on the Colombo Stock Exchange 2019-2021. Purposive sampling using 92 data is being used in the research. Random effect regression analysis and conventional assumptions are the analysis methods employed in this study. Findings: The findings demonstrate that institutional ownership, free cash flow, and asset structure significantly improve debt policy, whereas managerial ownership and dividend policy have no impact. Originality: The sample period of this study covers the pandemic period. This is a novelty in this study.