Firm Growth, Access to Capital Markets and Financial Structure: Evidence from Listed Firms in Sri Lanka

Abstract

This study investigates the financial structure of listed firms with an emphasis on growth and access to capital markets. Focus of this study is on how the company's growth and capital market access affects the company's financial structure. Accordingly, the independent variables are profitability, asset structure, firm size, age, the growth rate in sales and the dependent variable is debt ratio. This study is based on 20 listed service and manufacturing firms for the period of ten years from 2011 to 2020. Descriptive analysis, Regression model use to analyze the data. This study uses the Pecking order theory to show how the company’s growth and capital market access affect the company’s financial structure. The result of this study shows that Profitability, Asset structure, Firm size, Age, and Growth rate in sales do affect the financial structure of firms.