Browsing by Author "Perera, W.T.N.M."

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Analyzing the Impact of Behavioral Biases on Stock Investment Decision Making: Evidence from Sri Lanka Individual Investors at CSE
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Dissanayake, S.; Perera, W.T.N.M.
The objective of this study is to analyze the impact & relative importance of several prominent behavioral finance variables covered by the behavioral financial literature (overconfidence, loss aversion, risk perception, and herding) on stock investment decision-making at the Colombo Stock Exchange (CSE). This study's significance stems from the fact that local studies focusing on behavioral finance are rare, and thus the researchers believe that such research will raise awareness in this domain. A total of 303 active individual investors who actively traded on the Colombo Stock Exchange during the research period were included in the study. Following authorization of the questionnaire's reliability and validity, data were collected using a Likert scale questionnaire and analyzed using descriptive statistical tests, factor analysis, correlation analysis, multiclonality test, and paired sample T-test using SPSS software. The findings revealed that behavioral finance observed variables have an impact on the Colombo Stock Exchange, as represented by four behavioral factors influencing individual investors' investment decisions: overconfidence, loss aversion, risk perception, and herding. According to the findings, the variables Risk perception and Loss aversion had the highest impact and relative significance on the individual investor's investment decision-making at CSE. The study made recommendations for CSE investors to use scientific bases when making stock investment decisions, as well as need further research on the impact of behavioral finance on the several types of risks and yields at CSE.
Detection of earnings manipulation; evidence From Sri Lanka
(International Journal of Accounting & Business Finance, 2022) Wijesinghe, M.R.P.; Perera, W.T.N.M.; Yashodha, K.A.D.H.
Stream of literature on earnings management highlighted managers' opportunistic behavior to manipulate financial information with the view of extracting numerous unethical benefits. The purpose of this study is to investigate whether earnings manipulation exists in Sri Lanka as fabricating earnings which adversely triggers to the economy as a whole. We utilized Beneish model in our study as this model is a widely accepted, successful and important fraud sensitive indicator in detecting earnings manipulation under specific accruals method. As the sample, we considered twenty listed firms from Colombo Stock Exchange (CSE) for the period of 2013 to 2017 on quarterly basis. Days Receivable Index (DSRI), Gross Margin Index (GMI), Asset Quality Index (AQI), Sales Growth Index (SGI), Depreciation Index (DEPI), Sales General and Admin Expense Index (SGAI), Leverage Index (LVGI) and Total Accruals to Total Asset Index (TATA) were used to calculate the M-Score of the model which determines the susceptible companies where earnings manipulation could exist. Results, reveals that earnings manipulation exists in the entities listed on CSE at different degrees based on financial structure of such companies operating in different sectors. Our findings facilitate regulatory authorities to enhance effectiveness of standard-setting and monitoring to eliminate dodges where earnings could be manipulated. In addition, the study contributes to the knowledge base of academics and policymakers to make effective economic decisions.
Detection of relationship between earnings management and firm performance: evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Anosan, R.; Perera, W.T.N.M.
Earnings management is a newer concept in the Sri Lankan context as there is abundant foreign research that could be seen for the past three decades, most of them check the impact of firm performance on earnings management or test the impact of earnings management. The objective of this study is to find the relationship between earning management and firm performance with eight independent factors: day sales receivables index, gross margin index, asset quality index sales growth Index, depreciation index, leverage index, total accrual to total assets index, value-added productivity and two dependent factors: return on assets and return on equity on detection of the relationship between earning management and firm performance. Data from the entities within the sample will be extracted for ten years from the financial years of 2011/2012 to 2021/2022. The data collection will be done through secondary data sources such as company annual reports, the Colombo Stock Exchange, the Central Bank of Sri Lanka, and firm profiles to detect the relationship between earning management and firm performance. Scores for the ten factors were identified, and their relationship to earning management and firm performance will be measured using the SPSS.
Determinants of Financial Literacy of Management Undergraduates; Evidence from University of Kelaniya
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Madhushika, D.L.D.; Perera, W.T.N.M.
Financial literacy is the ability of individuals to manage their finances, make wise financial decisions, and establish long-term plans. The significance of financial literacy has increased as economies change, and financial markets become more complicated. This is especially pertinent for recently graduated students who are getting ready to turn into professionals and commence their professional careers. Consequently, establishing a strong foundation in financial literacy becomes crucial for university students' long-term financial well-being and success in job markets both domestically and internationally. This research study is conducted to identify the existing level of awareness of financial literacy and the factors that influence to financial literacy of management undergraduates of Sri Lanka. The researcher explored several previous research articles relating to the financial literacy of management undergraduates. According to the conceptual framework of the study, the dependent variable is financial literacy, and the independent variables are demographic factors, educational factors, and personality factors. The researcher collected data from the 250 final-year management undergraduates of the Faculty of Commerce & Management Studies at the University of Kelaniya by distributing a structured questionnaire. The researcher has conducted a multiple regression analysis to analyze the collected data. According to the research study's findings, the students have basic knowledge in financial literacy and other practices. Further, it was discovered that financial literacy positively correlated with age, gender, and family income. However, it is interesting to observe a negative correlation between financial literacy and educational variables. Moreover, it was revealed that there is a significant positive correlation between financial literacy and personality factors such as financial behavior, financial attitudes, and financial knowledge.
The Effect of Covid -19 on the Profitability: Evidence from Commercial Banks in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Nisansala, H.N.; Perera, W.T.N.M.
This study aimed to evaluate the financial performance of the banking sector during the COVID-19 pandemic. We analyze the pre- and post-COVID situation and evaluate the impact of the situation. The sample of this study includes annual reports of 15 banks currently operating in Sri Lanka under the Central Bank of Sri Lanka. This research used secondary data, data taken from financial reports, and annual reports issued by companies. The independent variable is banking profitability measured using Return on Equity, depending on variables consisting of nonperforming loan ratio, loan-to-deposit ratio, liquid asset ratio, interest rate, debt-to-equity ratio, and capital adequacy ratio. Qualitative descriptive panel data analyses were used to analyze the information in the reports to analyze the pandemic's impact on banking performance. The formulation of the regression model is used to analyze the data. Covid 19 hit the banking sector in a critical way in every country. Researchers gathered pre- and post-COVID situations data through commercial banks' annual reports to investigate during covid and post covid situations. The results show significant differences between the commercial banks' profitability measures at various stages of the pandemic. Important variables that impact banks' financial success include interest rate fluctuations, client behavior changes, government actions, and the effectiveness of risk management plans. The study's conclusions are beneficial not only to the banking sector but also to stakeholders, regulators, and policymakers who are developing plans to strengthen financial institutions' ability to withstand unexpected events in the future. In the end, the research hopes to add to the conversation on how global health crises and financial stability interact by offering practical advice for overcoming obstacles and promoting long-term development in the banking industry.
Effect of microfinance on profitability of commercial banks in Sri Lanka: comparison between pre & during covid - 19 pandemic
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Jayasundara, M.G.C.M.K.; Perera, W.T.N.M.
Microfinance enables small-scale financial services, such as microloans, savings, insurance, leasing and other financial services to small and medium-size entrepreneurs; Microloans are powerful development instrument that enables the underprivileged and small-scale enterprises who lack access and facilities to traditional banking and capital markets to be provided with the bare minimum of regulatory restrictions. Commercial banks with licenses play a huge and essential part in the country's financial system. With their introduction into the microfinance industry, they increased their contribution towards the financial system's stability and the country's development. State-owned commercial banks provide microloan services for different reasons. Their main focus is to carry out the government's policies such as poverty alleviation objectives. In contrast, private banks mainly focus on seeking a public image or maybe the ultimate objective is to increase profits. Only a few studies addressing the profit motive of commercial banks entering the microloans market could be found in the literature. As a result, the ultimate goal of this study is to determine the influence of microloans on commercial bank profitability and the impact of Covid-19. For measuring, the study acquired secondary data from published annual reports of 24 commercial banks operating in Sri Lanka, including the state banks, across the past 10 years to achieve this research goal. To evaluate and analyze the results, these data were analyzed using regression and exploratory data analysis. Microloans have a favorable link with commercial banks' net interest income and profit before tax, according to data research. In the microloans market, state-owned banks are the most dominant and active participants among commercial banks. They have the largest and most significant microloans portfolio and have made the most money by providing microlending services. The study's key finding was that microloans have a considerable impact on commercial bank profits and also there is an impact of Covid-19 as well. This finding would aid commercial bank decision-makers in their decision-making processes towards their success.
Factors Influencing Accounting Students’ Career Paths in Sri Lanka: Evidence from University of Kelaniya, Colombo and Sri Jayewardenepura
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Gunathilaka, L.D.L.R.; Perera, W.T.N.M.
This research paper aims to identify the factors influencing accounting students' career paths in Sri Lanka. Using a quantitative approach, the study employs a structured questionnaire administered to accounting undergraduates from the University of Kelaniya, the University of Colombo, and the University of Sri Jayewardenepura. The sample size of 327 is determined using the Morgan Table, considering a population of 2,000, a 95% confidence level, and a 5% margin of error. The key findings reveal positive relationships between intrinsic motivation, the influence of third parties, and career exposure with accounting students' career paths. However, extrinsic motivation does not exhibit significant relationships. The study's conclusions emphasize the importance of intrinsic motivation, external influences, and exposure in shaping accounting students' career paths. Limitations include the study's focus on three state universities in Sri Lanka, cautioning against broad generalizations. These findings suggest that universities should focus on fostering intrinsic motivation, providing career counseling, and offering internship opportunities to enhance accounting students' career development.
Impact of Behavioral Factors on Individual Investor’s Decisions in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, 2021) Jayasinghe, W.J.M.; Sujeewa, G.M.M.; Perera, W.T.N.M.
With the emerge of behavioral Finance theories based on psychology which attempts to understand how the emotions and biases of human can influence investor behavior in decision making process. Behavioral Finance theories suggested that the investors are not been rational in making decisions as assumed in conventional finance theories. Many studies have been conducted different capital markets in developed and developing countries. However, there is a dearth of studies about individual investor behavior in Sri Lankan capital market. The purpose of this study is to identify factors influencing on individual investor’s decision in Colombo Stock Exchange (CSE). To achieve this aim, the study attempts to test four main factors as independent variables namely heuristic factors, prospect factors, market factors and herding effect. The study identifies and test these factors through a structured questionnaire based on five-point Likert Scale and collect the data using sample of 210 individual investors. The findings indicate that a positive significant impact of heuristic factors, prospect factors, market factors and herding effect on individual investor decisions in CSE. Furthermore, the results also illustrate that herding effect indicate a highest positive significant impact on individual investor decisions. This implies that the individual investors in CSE are irrational very often and exhibit bias in making investment decisions. Findings of this study will be useful for individual investors, portfolio managers, financial planners and advisers, investment bankers and corporate executives to make sound investment decisions. Based on the findings of the study, the policy makers and regulators should make individual investors aware to follow rational behavior in making investment decisions in CSE in order to obtain the expected returns.
The Impact of Corporate Governance on Financial Performance: Evidence from Sri Lankan Banking Industry
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Perera, W.T.N.M.; Aruppala, W.D.N.
Baking industry undertakes the critical and vital roles in the financial system; the well-being of the economy and the mechanism of the banking system interconnected. The concept of Corporate Governance has become conspicuous in conjunction with banking industry. Attention to Corporate Governance has quite a long history since the seminal paper on the subject of the “Principal – Agent Problem” by Meckling which argued that the Principal – Agent problem as a consequence of the separation of ownership and control. Over the last two decades; Sri Lankan economy has encountered substantial fluctuations from countless amalgamation with the global economy ((CBSL), 2013). In 1990 Sri Lanka has utilized the capital market reforms and adopted the Anglo American Structure of Corporate Governance (Edirisinghe, 2015). The regulatory requirements which affianced with the Corporate Governance in Sri Lanka; governed by the Banking Act No. 13 of 1988, Companies Act No. 07 of 2007, Codes of Best Practices and Regulations issued by the Institute of Chartered Accountants of Sri Lanka (ICASL) and Securities and Exchange Commission (SEC) of Sri Lanka. This research empirically examines the quality of Corporate Governance practices in Sri Lankan banking industry and their impact on banks’ financial performance in the context of an emerging market such as Sri Lanka. The study concludes that there is no equivalence in the disclosure of corporate governance practices made by banks in Sri Lanka. Nevertheless they all disclose their corporate governance practices, but what is disclosed does not conform to any particular standard. Furthermore this study conclude that a positive relationship exist between financial performance, number of board meetings and education level. Besides that the study conclude that a negative relationship exist between financial performance, board size, gender, outside directors and CEO duality.
The Impact of Risk Management on the Profitability of Commercial Banks in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Sandamali, D.D.K.; Perera, W.T.N.M.
In today's complicated and dynamic financial environment, risk management is essential for banks. It is essential for maintaining banks' financial stability, preserving their good name, and building shareholder and consumer confidence. Banks may overcome various obstacles and continue to be viable over the long run by implementing effective risk management procedures. Therefore, this study shows a willingness to analyze the impact of risk management on the profitability of commercial banks in Sri Lanka based on empirical data and knowledge gaps in this field. A conceptual framework was created to assess the extent to which the impact of risk management on the profitability of commercial banks was investigated based on a literature review. The data was collected from published annual reports for the period of 2013 to 2022 of commercial banks in Sri Lanka. Therefore, this study is quantitative. The data analysis included descriptive analysis, correlation analysis, and regression analysis and was analyzed by using E-views Software. These research findings revealed that as a result, the findings' generalizability is limited. The study established a significant impact of independent variables of credit risk, operational risk, and interest rate risk on the dependent variable of profitability of commercial banks in Sri Lanka.
The Impact of the Intellectual Capital on Firm’s Financial Performance: Evidence from the Listed Consumer Service Companies in the Colombo Stock Exchange
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Thennakoon, U.P.D.M.; Perera, W.T.N.M.
This research study explores the impact of the value-added intellectual capital (VAIC) and financial performance within Sri Lanka's consumer service sector (listed on the Colombo stock exchange). Using statistical methods in E Views 08, the study examines the effects of three major events the COVID-19 pandemic, the 2019 Easter Sunday assaults, and difficult economic circumstances on the financial dynamics of 37 selected companies throughout the period of 2017 to 2023. Following the COVID-19 epidemic, worldwide upheavals impacted Sri Lanka's commercial environment, posing hitherto unseen difficulties such as strained supply chains, lower consumer spending, and operational limitations. The attacks on Easter Sunday created additional complexity and had an impact on consumer behavior and investment confidence in a number of industries. of addition to the external shocks, the study is further complicated by the wider economic conditions of Sri Lanka, which are characterized by structural problems and budgetary difficulties. The study evaluates the elements of intellectual capital and how they affect return on equity (ROE) using the VAIC framework. The study aims to provide a thorough understanding of how intellectual capital interacts with and potentially mitigates the impact of external shocks on the financial performance of consumer service industry companies in Sri Lanka by placing the findings within a larger economic framework and taking external events into consideration. By illuminating the complex dynamics that influence the financial results of businesses functioning in demanding and dynamic environments, the research's findings add to the body of knowledge and aid in actual decision-making.
The impact of working capital management on firms profitability comparison between pre covid-19 situation & during the covid-19 situation selected consumer service companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Sandaruwani, W.G.I.; Perera, W.T.N.M.
The profitability and liquidity of businesses are significantly impacted by working capital management, which is a critical aspect of financial management. The goal of commercial organizations is to increase shareholder wealth. Companies should manage their long-term and short-term financial resources to maximize shareholder profit, a goal aligned with wealth maximization. Managing working capital effectively and efficiently is crucial given the competitive environment and lack of financial resources. As a result, businesses prioritize managing their working capital. Furthermore, most academic literature has shown that effective working capital management increases firm value. This study examined the impact of working capital management on profitability compared to pre- and during COVID-19 situations using data from listed consumer service companies in the Colombo Stock Exchange from 2014 to 2021. This research will use the return on assets (RoA) to measure the performance of the organization and Days in Inventory (DI), Days Average Receivables (DAR), Days Average Payables (DAP) and Cash Conversion Cycle to measure the working capital management. This research used all listed consumer service companies as the population, and 29 consumer service companies were selected as the sample for the study. Data will be collected from the annual report from 2014 to 2021. In this study, Descriptive analysis, Correlation analysis and regression analysis are used to analyze the data. Accordingly, the findings of this will offer a better understanding of the impact of working capital management on the profitability of a company before and during the COVID situation. The study's findings highlight practical concerns that could help businesses in meeting their existing and future financial demands, control their daily operational activities, and improve both operational and financial performance. The study helps regulators recognize a firm's restrictions during crises so they may react accordingly.
Income diversification and performance of commercial banks in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Nipun, A.U.G.M.; Perera, W.T.N.M.
The general objective of this study is to investigate the impact of income source diversification on the bank performance of Sri Lankan listed commercial banks. This study covers Sri Lankan commercial banks during the sample period of 2012-2021. Ten licensed commercial banks were selected based on the highest market capitalization. The study was done using quantitative research methods with a deductive approach, and the secondary data was gathered from the annual reports of each bank. The performance measures return on equity and return on assets while income diversification is measured by the diversification index. Additionally, four control variables (bank size, financial leverage, growth rate and lending strategy) were used. Panel data regression is used as the main analytical tool as the data set contain cross sections and the time series nature of the data. Based on the findings of the research there is a positive relationship between bank income diversification and bank performance even though the degree of diversification is not at the peak within the Sri Lankan context. The study revealed that bank income sources are diversified significantly in the Sri Lankan banking industry and that both interest and non-interest activities significantly impact positively on bank performance. In contrast, bank growth in the number of branches significantly negatively impacts bank performance. According to the findings of this study, it can be concluded that there is a significant positive impact of income diversification and bank performance in Sri Lanka (Both Return on Assets and Return on Equity).
Non-performing loans & performance of commercial banks in Sri Lanka: comparison between pre & during covid - 19 pandemic
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Silva, M.T.M.; Perera, W.T.N.M.
The size of non-performing loans (NPLs) plays a key role in the stability of the banking sector of a country. The factors that explain the NPLs contain very important information for banks. This study aims to investigate the relationship between Non- Performing Loans & Performance of Commercial Banks in Sri Lanka as well as the impact of the COVID-19 pandemic on them. For this purpose, secondary data from the banking sector will be used. The independent variable is non-performing loans, and the dependent variable is the performance of commercial banks that will be used in the analysis. Statistical tools will be used to test research hypotheses including individual correlation and regression analysis. Relationship analysis will be used to find the relationship between the independent variable and the linear regression analysis between the dependent variable to examine the impact of non-performing loans on financial performance from 2011 to 2021. The expected findings of the research are that non-performing loans significantly influence the financial performance of commercial banks in Sri Lanka with a negative relationship. And also, non-performing loans are increasing because of the COVID pandemic. Thus, this study will be useful for bank management personnel to create ideas to protect banks from crisis and to enhance the performance of banks.
Prediction of financial distress of listed entities in Sri Lanka using financial ratios
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Akil, M.A.M.; Perera, W.T.N.M.
In the current nature and context in Sri Lanka, it is far more evident that the entities do suffer financial distress. Subsequently, they fail which in terms referred to as corporate failure. Corporate failure is the worst case that an entity or a business could come through; lasting financial distress does lead to such briefed corporate failure; hence predicting the forthcoming financial distress is significant in avoiding corporate failures and shakeouts. With standing with that, the purpose of this study is to develop a model using the devised financial ratios to predict the financial distress of listed entities in Sri Lanka. As a result of the model, built upon the financial ratios could be applied in any context in predicting financial distress at any given time. The study utilizes publicly available data from the corporate annual reports of a total sample of 70 firms which are clustered into two as 35 distressed firms and 35 un-distressed firms which are of similar capacities, listed on the Colombo Stock Exchange spanning 6 years from 2016 to 2021. A total of ten devised financial ratios were used in determining the model and analyzed using Logistic Regression Analysis. Analysis of the statistical testing results indicated that the prediction accuracy of the model consistent with the financial ratios is 77.86% one year before distress. Furthermore, the predictive accuracy of the model in all three years before distress is above 72%. Hence the model is robust in obtaining accurate results for up to three years before failure. The final model includes three financial ratios: working capital to total assets, debt ratio and cash flow from operating activities to total assets as these variables have more explanatory power in predicting financial distress. Therefore, pertaining to the need and the current context, the businesses, investors, employees, suppliers, financial institutions, regulatory agents and auditors can be used from the developed model in Predicting the Financial Distress of Listed Entities in Sri Lanka.
Public debt & economic growth: evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Rathnayake, R.W.S.K.; Perera, W.T.N.M.
One of the primary macroeconomic indicators that determines a country's standing globally is public debt. The relationship between public debt and economic growth has been extensively studied in several countries, and the effects of public debt on economic growth vary from country to country. Therefore, it is critical to conduct individual studies for each country. As a result, this analysis uses the most recent data available for the past 45 years to determine the relationship between public debt and economic growth in Sri Lanka. This was investigated utilizing econometric approaches and annual time series data from 1977 to 2021 in order to achieve the goal of determining how Sri Lanka's public debt affects economic growth. The normality and unit-roots values of the macroeconomic time series are examined using the Jacque Bera (JB) and Augmented Dickey-Fuller (ADF) tests, respectively. The short-run relationship of variables studied using the Error Correlation Model and the long-run relationship of variables analyzed using the Engel-Ganger residual-based model (ECM). The analysis demonstrates that Sri Lanka's governmental debt has increased during the study period on both public domestic debt and public external debt. Additionally, throughout that time the public external debt grew closer to the public domestic debt. Economic growth is negatively and significantly correlated with public debt, including public domestic debt, public external debt. In comparison to external debt, domestic debt has a strong negative impact on economic growth over the long term. Furthermore, domestic debt has a short-term negative impact on economic growth than external debt. Due to the negative consequences on economic growth and the need of using public debt effectively for Sri Lanka, this report advises the government to set some borrowing limits.
Public Debt and Economic Growth: Comparison among Sri Lanka, India and Bangladesh
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Udayangi, W.P.; Perera, W.T.N.M.
Public debt is one of the main macroeconomic indicators that show a country's position in the global market. This research endeavors to conduct a comparative analysis of the relationship between public debt and economic growth among three prominent South Asian nations: Sri Lanka, India, and Bangladesh. Each country possesses unique economic dynamics, making it imperative to scrutinize the impact of public debt on economic growth within this regional context. This study aims to examine whether an increase in public debt has a positive or negative effect on the economic growth rate in these nations. Three South Asian countries namely Sri Lanka, India, and Bangladesh were selected as the sample of this study. Data will be collected from mainly World Bank Indicators for the period from 1975 to 2021. In this study, descriptive and analytical research designs were primarily used to analyze the data. This research study is composed of five independent variables representing Domestic debt, long-term external debt and short-term external debt, and interest payment. The major findings of this research are the independent variables domestic debt and external debt have negative coefficients of -1.62379 and -0.28379 respectively. But, domestic debt appears to have no significant effect. Also, the research found that there is a positive relationship between long-term external debt, short-term external debt, and interest payment with countries' economic growth. The research emphasizes the necessity for tailored debt management strategies and fiscal policies suiting the specific economic conditions of Sri Lanka, India, and Bangladesh. Understanding the unique dynamics of debt and economic growth in each nation is crucial for formulating effective policies that foster sustainable development.
Relationship between investor rationality and decision making: evidence from CSE
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Gamage, J.A.; Perera, W.T.N.M.
The innovation of the financial industry has seen an increase in financial products. Individual investor-based investing activities have also become common in the Sri Lankan financial industry. Thus, financial managers prioritize clarifying individual investors' investment behaviors and incorporating them into investment decision making. The main purpose of this study is to investigate the relationship between rational decision-making and behavioral biases among individual investors in Sri Lanka. This study mainly investigates the relationship between behavioral biases and rational decision-making by examining two behavioral biases, which are relative differences between self-attribution bias and overconfidence bias by various demographic factors. The behavioral biases have either been identified in previous studies, or their effects on individual investors have been examined. However, no prior attempt has been made to examine the connection between behavioral biases and the capacity for rational decision-making, particularly in the context of Sri Lanka. Data has been collected using a structured questionnaire, and 500 investors in Colombo Stock Exchange have responded from October to November 2022. SPSS Statistics software has been used to test the relationship between rational decision-making and behavioral biases. Findings show that individual investors have both rational and irrational behaviors. The findings of this study are more significant for the new and current investors, policymakers, investment advisors, and bankers especially because of the current economic situation in the country.
Relationship between tax composition and economic growth: evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Sewwandi, S.A.K.M.; Perera, W.T.N.M.
Over the years, economists, policymakers, and researchers have engaged in a heated discussion about how taxes affect production growth. Whether the changes in tax composition have an effect on output growth over the long run is one of the primary topics that has generated more heated discussion in the field of public finance. Less clear findings on the empirical front have been emphasized in the literature. This study's objective is to calculate, within the confines of an endogenous growth model and utilizing time series annual data from 1982 to 2021, the aim of this is to study the Relationship between tax composition and economic growth evidence from Sri Lanka. We testing the Relationship between tax composition and economic growth of Sri Lanka. This analysis makes use of annual time series data for the years 1982 to 2021, which is when Sri Lanka's economic liberalization strategy was put into place. All of the information was gleaned from several editions of the Central Bank of Sri Lanka's annual report. The study also calculates the effects of distortionary and nondistortionary taxation on output growth using data on tax receipts. The theory also suggests that non-distortionary taxation has a negligible effect on growth, whereas distortionary taxes have considerable effects. Therefore, both aggregate and disaggregated data for taxes were taken into consideration in the analysis to determine whether tax structure adjustment was related to the output level. While there is a unidirectional causality running from income taxes, value added taxes, and foreign taxes to production growth, other taxes are caused by output growth, according to the empirical findings of this study. The study also discovered that income taxes and other taxes have negative and statistically significant effects on growth. This reflects the fact that, in addition to income taxes, other taxes, such as taxes on other economic activity, have stifled long-term growth.
Sustainability Reporting Practices on Financial Performance in Listed Companies in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Priyadarshana, W.M.K.L.; Perera, W.T.N.M.
Today, sustainability is a critical issue for the business world. Investors' interest in socially responsible investment has grown rapidly in recent years. As a result, sustainability has the potential to impact company performance. This study investigated the impact of Sustainability Reporting Practices on Financial Performance in Sri Lankan listed companies. Data was gathered from annual reports of CSE-listed companies in five industries: manufacturing, plantations, beverage and tobacco, construction and engineering, and power and energy. The samples covered 6 years from 2016 to 2022. The Annual Reports and Accounts of these companies were taken from the CSE website. Other secondary data and information were collected from textbooks, journals, the internet, etc. Statistical analysis revealed that compliance with Sustainability Reporting would have a significant impact on the Organization's Financial Performance. These findings imply that enterprises in Sri Lanka, and presumably other locations, stand to benefit from implementing and improving Sustainability Reporting Practices. This increases openness and accountability and places the firm in a business landscape where sustainable practices are gaining popularity. The paper's recommendation for the implementation of sustainability reporting practices serves as a strategic guideline for businesses seeking to align their operations with the growing demand for responsible and sustainable business practices, fostering both financial success and positive societal impact. As a result, the paper recommends that Sustainability Reporting Practices be established to provide a foundation for improving the firm's performance.