Browsing by Author "Karunarathne, W.V.A.D"

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Factors Influencing Individual Investment Decisions in Stock Market: Evidence from Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Gunarathana, K.P.D.S.; Karunarathne, W.V.A.D
The theory of behavioral finance assumes that the characteristics of individuals in stock markets and the information structure can systematically impact their investment decisions in the stock market. This study henceforth aims at assessing the factors that influence the individual investment decisions of the investors in the Colombo Stock Exchange. The study further incorporated the concept of behavioral finance and individual investment decision by considering 215 investors from a sample gathered from retail investors in the Colombo Stock Exchange, where the responses are solicited using a questionnaire consisting of 20 questions that were to be answered in a five-point Likert scale. The finding of the study established a significant positive impact of the Covid 19 epidemic situation, political stability, and social media information on individual investment decisions. Rational factors such as share price and company dividend policy may not significantly influence individual investor stock selection. At the same time, the study found that factors such as accounting information and macro-economic factors can significantly influence individual investor investment decisions. Further, it revealed that the family, stockbrokers’ firms, and peers significantly impact individual investment decisions. However, investor behavior on risk does not have a significant impact on individual investment decisions.
The Impact of Accounting Practices on Performance of Small and Medium Enterprises in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Navarathna, B.C.U.; Karunarathne, W.V.A.D
This research aims to find out the effect of accounting practices on the performance of SMEs in the Rathnapura district in Sri Lanka. The SME sector has become a crucial segment in developing countries. Therefore it is essential to improve the growth of SMEs to gain sustainable development. Furthermore, Empirical results emphasized that better accounting practices lead to a higher chance of success and good record keeping. The types of records maintained could be correlated with business success on the one hand or the resistance to failure on the other. The researcher adopted a descriptive research design. The target population constitutes SMEs in Rathnapura District, which a representative sample was selected through a stratified random sampling technique and the selected sample was 225 SMEs in Rathnapura District. Descriptive statistics, correlation analysis, multiple regression methods were applied to analyze the data. The study was considered the challenges associated with SMEs' accounting practices, level of accounting knowledge, maintaining accounting records, and the impact on the financial performance of SMEs in preparing financial statements. The study found out that accounting knowledge level, maintaining accounting records, and challenges associated with accounting practices had a significant influence on financial performance. In contrast, the influence of preparing financial statements had an insignificant influence. The results of the multiple regressions revealed that accounting practices had a significant influence on the financial performance of SMEs. The study recommends that it should be ensured and increased education on the need for accounting practices in SMEs. This can be done through seminars, workshops, symposia, and other mediums to maintain proper accounting practices.
Impact of Behavioral Factors on Investment Decisions: Evidence from Individual Investors in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Wimalarathna, A.G.I.K.; Karunarathne, W.V.A.D
Traditional finance theory has presumed that investors are always rational in decision-making in the stock market and optimize their profit, focusing on the trade-off between risk and return. However, behavioral finance studies revealed that investors do not behave rationally since various cognitive illusions and emotions influence decision-making. The studies about behavioral finance in Sri Lanka are limited, and this study is expected to make a significant contribution to the development of the economy of Sri Lanka. The primary objective of this study is to identify the impact of behavioral factors on investors' decision-making in the Colombo Stock Exchange, and the secondary objective is to identify the relationship between overconfidence, representativeness, availability bias, and anchoring bias effect for the investment decision making in CSE. The all-local individual investors who are invested in CSE are the population, and out of them, 300 investors were selected representing the population. A structured questionnaire has been distributed to collect primary data, and those collected quantitative data will analyze through SPSS. The major variables of this study will be overconfidence, availability bias, and representativeness effect emphasized the significant positive relationship between investment decision making in CSE. However, the anchoring bias is insignificant with investment decision-making in CSE. The study will conclude that overconfidence, availability bias, and representatives are the most prominent factors for CSE investors' investment decision-making. The results of this study can be used by various parties such as individual investors, investment advisors, financial institutions, stock market regulatory, and future researchers.
The Impact of Corporate Governance on Integrated Reporting Quality of the Listed Companies in the Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Ramanayake, R.A.A.I.B.; Karunarathne, W.V.A.D
Integrated reporting and sustainability reporting are the new themes in corporate reporting in the Sri Lankan context. However, listed companies in Colombo Stock Exchange are trying to follow this modern reporting trend when preparing annual corporate reports. As a result, decision-makers such as shareholders, creditors, and investors' information asymmetry could be reduced. Therefore, listed companies were able to create shareholders’ value for an interested party for the entity. So, demand for integrated reporting is being increased. The Institute of Chartered Accountants of Sri Lanka implemented this modern corporate reporting approach in Sri Lanka in 2015. So, this study aims to identify the factors which affect for increasing level of integrated reporting of listed companies in the Colombo Stock Exchange. The sample consists of 76 companies listed on the Colombo stock exchange during the period of the year 2016-2020. Accordingly, the research is based on a quantitative methodology. Data were collected on secondary data collection method and gathered data from the listed companies in Colombo Stock Exchange that practice integrated reporting. This research aims to find out the extent to which corporate governance affects the quality of integrated reporting companies listed on the Colombo stock exchange.
The Impact of Corporate Governance on Intellectual Capital Efficiency: Evidence from the Banking and Consumer Services Companies in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Nimasha, I.H.D.; Karunarathne, W.V.A.D
Intellectual Capital (IC) is considered wealth to an organization, and it indicates its capabilities. It has been proven that adopting a better corporate governance system would ensure the maximization of shareholder wealth through the efficient use of IC. The purpose of this study is to examine the impact of corporate governance on IC efficiency by comparing the banking and consumer services industries in CSE and examining the industry's moderate role in the relationship between corporate governance and IC. The prior studies used different corporate governance mechanisms to evaluate the impact of corporate governance on IC efficiency. However, when it comes to the Sri Lankan context, studies related to this field are limited. Moreover, the findings of this study contribute to existing knowledge in corporate governance and IC in Sri Lanka. Further, this study uses selected corporate governance mechanisms as independent variables and the Value- Added Intellectual Coefficient (VAIC) model to examine the efficiency of IC. Furthermore, annual data of the listed banking and consumer services companies from 2016 to 2020 in CSE is considered in this study. Furthermore, panel regression analysis is used to investigate the impact of corporate governance on IC efficiency and the moderate effect of the industries on the relationship between corporate governance and IC using the E-views software. Furthermore, the findings of the study will be given important implications for managers, investors, and society in making more technical and accurate decisions on corporate governance and IC. Moreover, the study may contribute to the existing knowledge in corporate governance mechanisms and IC of industry stakeholders to evaluate the business.
Impact of Credit Risk Management on Financial Performance of Sri Lankan Commercial Banks: With Special Reference to Commercial Banks in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Dilshan, N.P.L.; Karunarathne, W.V.A.D
In Sri Lanka, commercial banks play a predominant role in credit expansion and the provision of credit facilities. Because conditions and uncertainties are connected to the banking sector. Many types of risks are exposed to them. Among these threats, a serious threat to success is credit risk. Hence the study investigated the impact of credit risk management on the financial performance of commercial banks in Sri Lanka for a period of ten years (2010- 2020) with reference to Systemically Important Banks (SIB). Moreover, study compare the impact of credit risk management and financial performance of commercial banks before and during the Covid 19 situation. The sample of the study consists of all commercial banks in Sri Lanka including two state banks and three major domestic private banks, which will be selected by considering the timing and availability of data. Secondary data will be obtained from bank annual reports and Central Bank of Sri Lanka (CBSL) and the data will be analyzed using Ordinary Least Squared (OLS) regression, The Gross Non- Performing Loan (GNPL) will be used as the credit risk proxy, while the CAMELS model will be used as the performance proxy. According to the regression results, credit risk has a significant and negative effect on financial performance concerning Capital adequacy, assets quality, management efficiency, and liquidity. on the other hand, the study found that only the insignificant factor of the CAMELS model that affects the performance of commercial banks in Sri Lanka is sensitivity. However, the study concludes that credit risk remains a major concern for commercial banks in Sri Lanka because credit risk is an important predictor of bank financial performance. The findings help the policymakers in setting better performance targets and enable bank managers to allocate capital more efficiently.
Impact of Firms’ Characteristics on Integrated Reporting: Evidence from Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Madhuhansi, M.K.N; Karunarathne, W.V.A.D
Integrated reporting (IR) is a modern expansion in the innovative reporting dimension. Recently Integrated Reporting has been fascinated by many companies. Since in Sri Lanka applying IR is not a compulsory requirement but companies embrace IR in the different levels with the compliance of guiding principles and content elements given by the International Integrated Reporting Council (IIRC). This study aims to investigate the impact of a firms’ characteristics on integrated reporting quality which are listed in the Colombo Stock Exchange (CSE). Beyond the theoretical suggestions, this study provides practical implications to the different types of stakeholders who use the information to make different business decisions. For this study, 50 listed companies that used IR practices in the CSE have been randomly selected as the sample. Secondary data were collected from the annual reports of the IR adopted companies for the period from 2016 to 2020. Integrated reporting quality was used as the dependent variable of the study and profitability, financial leverage, ownership dispersion, board diversity, and board independence were used as the independent variables. Panel regression analysis was employed to analyze data with the E-Views package. The findings of the study will help decision-makers and future researchers to get an idea about the importance of the use of integrated reporting and how it fulfills the corporate disclosure requirements of the company. This research finding will be beneficial to examine that the level of firms' specific characteristics impact on quality of IR and what is the existing level of applying IR practices of listed companies in the CSE.
The Impact of Online Education and Learning Status on Students’ Satisfaction during the Covid-19 Pandemic Situation: Evidence from the Management Undergraduates in State Universities in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Swarnamali, R.C.; Karunarathne, W.V.A.D
Online learning is an alternative method of network-enabled knowledge transferable to many recipients. The outbreak of the COVID-19 pandemic has highly influenced the higher education sector, and it stipulated in the rapid growth of online teaching and learning all over the World. In Sri Lanka, most state universities and higher educational institutes also commenced their teaching and learning process through online platforms. Accordingly, the success of the online learning option and the student's satisfaction with the online education is a timely important, and contemporary research. Therefore, this study investigates the impact of online education and the learning status of undergraduates on their satisfaction during the Covid-19 pandemic. In order to study the Satisfaction of undergraduates on online education 300 third-year and fourth-year undergraduates were selected to the sample. The study population has been considered all state universities which has established Management faculties. Quantitative research is carried out through an online survey with a structured questionnaire through WhatsApp and Email. Descriptive statistical measures, correlation, and regression analysis techniques are used to analyze data using SPSS software. The outcome of the study will be helpful for the Policymakers, Ministry of higher education, University Grant Commission, University Academics, and administrative staff of Sri Lankan Universities in developing new education policies and strategies.
Impact of Sustainability Reporting on Firm’s Financial Performance: A Comparative Analysis between Banking Industry and Consumer Service Industry Companies in the Colombo Stock Exchange in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Swarnamali, R.T.; Karunarathne, W.V.A.D
Sustainability reporting, which comprises economic, environmental, and social performance towards achieving better financial performance, has become a contemporary issue due to the absence of an exact model for evaluating this field. Therefore, this study aims to identify how sustainability reporting influences a firm's financial performance by using the main industries of the bank industry and consumer service industry in the Colombo Stock Exchange (CSE). Further, the study intends to investigate whether there is any difference in the level of sustainability reporting between the two industries and whether there are any changes in the level of sustainability reporting across the period of five years from 2016 to 2020 for the two industries. This study is conducted as quantitative research, and it is collected data through annual reports of listed banking and consumer service industries in the CSE. To measure the sustainability disclosures in annual reports, the study is calculated a sustainability reporting disclosure index based on the Global Reporting Initiative (GRI) guidelines. Return on Assets (ROA) and Return on Equity (ROE) are complementarily considered as the dependent variable which is used as the proxies for financial performance. Descriptive statistics and Panel regression methods are employed in analyzing data of the study using EViews software. The findings of this study will be provided a great contribution to the sustainability reporting literature and to make comparison banking industry and consumer service industry.
Intellectual Capital and Financial Performance: Evidence from the Banking and Diversified Financial Companies in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Maduwanthi, W.M.; Karunarathne, W.V.A.D
Global economies have transferred from an information-based economy to a knowledge-based economy. In that, Intellectual Capital (IC) is considered a vital corporate asset. Numerous investigations have highlighted that organizations can achieve competitive advantages through IC. This study aims to compare the results of the effect of IC on the Financial Performance of firms belonging to Banks and the Diversified Finance sector companies listed on the CSE. In addition, this study examines the moderating effect of industry on the relationship between IC and Financial Performance. Most of the prior studies have focused on multiple ranges of sectors. Still, direct attention has not been given to do a comparative study among the sub-sectors of the financial industry. Therefore, this study focused on comparing the Banking and Diversified Financial sectors to fulfill that gap. The Value-Added Intellectual Capital model (VAIC) is used to measure the IC components: Human Capital Efficiency, Structural Capital Efficiency, and Capital Employed Efficiency, while Return on Asset is used as the Financial Performance indicator. The sample of the study comprises 12 banking and 34 Diversified Finance companies' annual reports from 2015 to 2020. Panel regression analysis is used to examine the impact of IC on ROA by using E- views software. Empirical results indicate that HCE has a significant association with the Financial Performance of the financial companies in Sri Lanka. The finding of this study highlights the importance of knowledge-based resources in shaping the value of businesses in the emerging Banking and Diversified Finance sector companies in Sri Lanka.