Browsing by Author "Weerasinghe, W.D.J.D."

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Adoption to E-Banking Services by Banking Customers: With reference to Licensed Commercial Banks in Colombo District
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Subodha, R.A.K.; Weerasinghe, W.D.J.D.
Introduction: This study investigates factors influencing of Adoption of E-banking by Banking Customers in Sri Lanka with special reference to Colombo District. Accordingly, this study aims at examining the impact of subjective norms, the customer attitude and perceived behavioral control towards E banking on customer adoption in Sri Lanka. Design/Methodology/Approach: This study employs descriptive research design techniques in gathering, analyzing, interpreting and presenting the information. Also, study has used convenient sampling technique with a sample of 200 mobile banking users in Colombo district and the data is collected through a questionnaire. Findings: It has resulted a positive significant impact on customer adoption by e banking by Subjective Norms and Perceived Behavioral Control with R square value of 0.572%. The results and the findings of the study shows which variables have impact on customer adoption towards E Banking and how the age has been impacted on adoption towards E Banking in Sri Lanka. Conclusion: This study can be contributed to increase the adoption for E Banking Services in Sri Lanka.
Assessing the Applicability of Uncovered Interest Parity in the South Asian Frontier Financial Markets
(Department of Finance, University of Kelaniya, 2023) De Silva, W.A.M.; Weerasinghe, W.D.J.D.
Purpose: The purpose of this research is to establish whether, the Uncovered Interest Parity (UIP) condition exists in Bangladesh, Pakistan, and Sri Lanka, categorized as the South Asian frontier financial markets. Design/Methodology/Approach: The research uses the deductive approach. The data was collected from International Monetary Fund Statistics. The data set used consists of monthly data from March 2010 to April 2020. Interest rate differential was employed as the independent variable in this study, with the foreign currency exchange rate differential as the dependent variable. The researcher used the Cointegration model and the Vector Error Correction Model to analyze the data to measure the long-term and short-term impact respectively. Findings: It was found that, interest rate differential had a statistically insignificant negative relationship with the exchange rate differential in all three countries both in the short and long run. The overall test results show that the rejection of UIP hypothesis within the given time frame in South Asian frontier financial markets confirming the previous findings relating to practical situation of UIP condition. Originality: This article reviews the rejection of UIP condition in Bangladesh, Pakistan and Sri Lanka, categorized as the South Asian frontier financial markets. In a single paper it provides both short-term and long-term rejection of UIP. The rejection of the UIP condition implies that there is a possibility for an arbitrage opportunity. Future Direction: The future research can assess the applicability of UIP for a larger sample and different data analysis techniques such as Generalized Method of Moment.
Determinants of Commercial Banks’ Lending Behavior in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Gimhana, K.P.S.; Weerasinghe, W.D.J.D.
Purpose: This study aims to examine the determinants of lending behavior of commercial banks in the Sri Lanka. Commercial banks are critical to the growth and prosperity of the economy. There are 24 commercial banks in Sri Lanka, both locally and internationally owned. Design/Methodology/Approach: The two theories, Portfolio theory and Bank Lending & Loanable Fund theory have been revisited through this study. Further, two parameters are used to calculate the sample size. They are long-term banking activities, as well as the availability of each bank's data during the time-period under consideration. This study relied on secondary data, and it spanned eleven-year period from 2010 to 2020. The key sources of secondary data for this study are annual reports from local commercial banks and annual reports. Altogether, 23 commercial banks in Sri Lanka sampled for the study. The descriptive statistics, correlation, and multiple regression analysis were used to analyze the collected data. Findings: The finding implies that commercial banks' lending is dependent on depositor's money. It means that as the ability of the bank to mobilize more deposits, the amount of loan granted to the customer will improve. Originality: It is investigated that to attain profitability and liquidity, Sri Lankan commercial banks should improve their methods for mobilizing public deposits and build a robust liquidity management mechanism, according to the report.
Determinants of Non-Performing Loans in Licensed Commercial Banks and Impact of Covid 19 on Nonperforming Loans: Evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Weerakoon, K.W.H.M.Y.R.; Weerasinghe, W.D.J.D.
Purpose: The purpose of this study is to ascertain the determinants of the non-performing loans and identify the impact of COVID19 on non-performing loans in licensed commercial banks in Sri Lanka. Design/Methodology/Approach: The study employed panel data methodology to investigate the effect of bank specific and macroeconomic factors on non-performing loans. This study takes secondary/ quantitative data. Panel unit root test has been undertaken in order to test the stationary of the variables. Hausman test and Breusch-Pagan Lagrange multiplier test were used to select the appropriate model out of pooled, random and fixed effect. The research conducted for pre-pandemic period (2012-2019) and period with the pandemic (2012-2021) to identify the impact of COVID19 on non-performing loans using selected 20 licensed commercial banks. Findings: Findings revealed that return on assets and loan loss provision has a significant positive influence, while loan to assets ratio positively associated with non-performing loan and no significant impact in both periods. Bank size has a significant negative influence. Real GDP growth rate, unemployment rate and lending interest rate were highly significant in both periods. Contrary to literature, inflation rate has a positive insignificant relationship with nonperforming loans. Originality: The findings of the study which details the determinants of non-performing loans of licensed commercial banks in Sri Lanka is beneficial for different stakeholders. The findings of the study might be used as a directive input in developing regulatory standards regarding lending policies in banking sector in Sri Lanka.
Equity Market Volatility Behavior in Sri Lankan Context
(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Morawakage, P.S.; Weerasinghe, W.D.J.D.
Colombo Stock Exchange (CSE) in Sri Lanka is at its first level of emerging markets. Volatility of emerging markets are considered to be high and characterized by complex features. Therefore, this study focusses on examining the volatility behavior of Colombo Stock Exchange with advanced econometric models. Here GARCH, EGARCH and TGARCH models are used to capture the complex volatility features. It is observed that volatility clustering and leverage effect exist in Colombo Stock Exchange. Further, negative shock creates more volatility compared to a positive shock generated in the market. TGARCH model assuming student-t probability distribution function is more suitable to explain the volatility in Colombo Stock Exchange among the models described above according to the Akaike and Schwarz information criteria.
Exploring the Potential of Social Value Creation through Digital Social Innovation in Sri Lanka: Special Reference to Colombo District
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Marasinghe, H.K.; Weerasinghe, W.D.J.D.
Introduction: This study mainly aims to identify the potential social value creation through digital social innovations & relationship between digital innovation and the social impact of social entrepreneurship. Methodology: This study associates with the inductive method under qualitative research. Moreover, multiple case study technique is use for social entrepreneurs operating in Colombo District for this study. In this research mainly gathered data through the ten in-depth interviews as primary data. Thematic analysis used in analyzing the data. Findings: In this study, the researcher has found that social entrepreneurs have create social value under economic, social and socio-economic. Entrepreneurs are increasingly moving into digitalization either by transitioning traditional businesses or by setting up of old methods. As competition is getting stiffer with each passing day, the factors enhancing a firm's capability to move in the value creation through digitalization is becoming increasingly important. Therefore, the researcher has found how social entrepreneurs manage new technologies to innovation under technology adoption and marketing strategies. Conclusion: In conclusion, social entrepreneurship seeks emerging opportunities and try to solve environmental and social problems to maximize value creation in society. Encouraging social entrepreneurs to utilize collaborative digital platforms where they can share knowledge, resources, and best practices. It will be a positive impact to economy system & society with better solutions.
Exploring the Potential of Social Value Creation Through Digital Social Innovation in Sri Lanka: Special Reference to Gampaha District
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Shalomi, K.H.; Weerasinghe, W.D.J.D.
Introduction: This research explores the potential of social value creation through digital social innovation in Sri Lanka, with a special focus on the Gampaha District. Social entrepreneurship, driven by a combination of entrepreneurial spirit and social innovation, aims to address pressing societal challenges and create innovative solutions. Despite the global attention to social entrepreneurship, there is a dearth of research in the Sri Lankan context, particularly regarding the role of technology in innovation and social value creation. Methodology: The study adopts a social constructivist paradigm and employs the Case Study Methodology (CSM) to investigate ten social enterprises. The research questions examined include how social value is created through social enterprises and how social entrepreneurs leverage new technologies for innovation. Findings: The findings reveal that social value creation in Sri Lanka occurs through economic impact, socioeconomic improvements, social impact, community engagement, and innovative solutions. Moreover, the importance of managing new technologies for innovation is evident, with technology adoption, innovation strategies, skills development, and resource constraints emerging as key factors. Conclusion: This research contributes to the understanding of how social enterprises in Sri Lanka create social value and harness technology for innovation. The findings highlight the need for more support for social entrepreneurs and the integration of digital technologies in their endeavours. The study emphasizes the role of social entrepreneurship in driving positive change and creating social value in Sri Lanka, and the potential for technology to amplify this impact.
Factors Affecting the Behavior of Investors: Empirical Study Based on Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Fernando, C.S.P.K.; Weerasinghe, W.D.J.D.; Perera, L.A.S.; Weerarathne, D.I.
The primary motivation of this research is to examine the investment selection factors which the investors expected to consider as important in an investment decisions and to rank the factors accordingly based on Colombo Stock Exchange (CSE), and to find out whether the investors consider the same pattern of investment selection factors in making the real investment decision. Data for the study were collected from 50 individual retail investors in the Gampaha district through a questionnaire by using convenience sampling. To analyze the data the researchers have used frequency table and descriptive analysis technique. It was found that, investment selection factors that investors expect to consider, the most important in making an investment decision are; past performance of the stock, Stock brokers’ advice, Company reputation, Company earnings and for quick selling purposes. Further, in making the real investment decision, the highest frequency of the investment selection factors considered are; past performance of the stock, Stock brokers’ advice, advice from others, for quick selling purposes and to get benefits. Sri Lankan investors seem to be under confident, uncertain and are very sensitive to others’ reactions and opinions. The most common determinants that have a significant impact on the investors’ behavior are past performance of the stock, Stock brokers’ advice, advice from others and for quick selling purposes.
The Impact o0f Cryptocurrency on the Stock Market Performance in Sri Lanka: An Empirical Study Based on Bitcoin
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Perera, G.J.P.; Weerasinghe, W.D.J.D.
Introduction: This study examines the impact of cryptocurrency on the stock market performance in Sri Lanka. It is an empirical study based on Bitcoin. Methodology: The analysis uses the information of Bitcoin and the Stock market indices, ASPI Return, and S&P SL20 Return of Sri Lanka for the period 2010–2023 on a weekly basis. The Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model has been estimated separately for the ASPI Return and S&P SL20 Return time series data using the Maximum Likelihood (ML) method with the Autoregressive Conditional Heteroskedasticity (ARCH) algorithm. Findings: The empirical results indicate a weak negative relationship between Bitcoin returns and ASPI Returns, suggesting a subtle inverse correlation. In contrast, a weak positive relationship is observed between Bitcoin returns and S&P SL20 returns in the Sri Lankan context. These findings provide insights into the dynamic interactions between Bitcoin and the two stock market indices in Sri Lanka. Conclusion: This paper makes two significant contributions to the existing body of knowledge. Firstly, it introduces Bitcoin returns as a determinant influencing stock market performance in Sri Lanka. Secondly, it explains the relationships between Bitcoin and both ASPI Return and S&P SL20 Return in the Sri Lankan market context, enriching our understanding of the dynamics between cryptocurrency and traditional stock indices.
Impact of Borrower Characteristics on Micro Loan Default among Fisheries Sector Evidence from Negombo Sri Lanka
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Wathsala, M.G.D.A.; Weerasinghe, W.D.J.D.
Introduction: This research examines the challenges of the microfinance sector with a focus on the alarming microcredit default rate in the fishing industry in Negombo, Sri Lanka. The study identified the main research problem as high incidence of loan defaults, which negatively affects the growth and sustainability of microfinance institutions. The objective is to explore borrower characteristics that influence microloan default and suggest strategies to reduce microloan default. Methodology: This research follows a quantitative methodology. A structured questionnaire was designed. The questionnaire was collected from 147 microfinance borrowers of Negombo Wallawediya Fishermen's Association through non-probability convenience sampling. SPSS version 23 was used to perform exploratory factor analysis. The findings of this study confirmed six borrower’s factors useful in explaining microfinance loan defaults in Sri Lanka. This research examines the characteristics of microcredit defaulting borrowers in the Negombo fisheries sector. The study focuses on key determinants such as size, gender, income, experience, household size and education level to determine the impact of loan default on the Negombo fisheries sector. Findings: The study found that age, gender, income, experience, household size and education level affect fishermen's late payment. Gender emerges as a critical factor, with women more likely to default on payments than men. Younger borrowers are also more prone to default, suggesting the need for financial education tailored to their needs. Level of education has a modest effect on non-compliance, emphasizing the potential benefits of promoting financial education. Conclusion: Implications suggest further testing and targeted interventions recommendations include social orders and public policies for credit distribution background checks future research proposals include different data collection methods and sustainability approaches limitations of inclusion questions dependent and qualitative methods in future research and reveals a need for regional variations overall the study provides valuable insights and practical recommendations for stakeholders in the microfinance sector.
Impact of Claim Management on Profitability of Listed Insurance Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Wathudura, S.M.; Weerasinghe, W.D.J.D.
Introduction: This research study determines the impact of claim management on profitability of listed insurance companies in Si Lanka. Design/Methodology/Approach: The study based on a quantitative approach used secondary data for the descriptive statistics and the multiple regression techniques. Entire all insurance companies are considered for the population, where listed insurance companies are used as sample of the study. Findings: The appropriate model that has selected for this study was the random effect model. The findings in this study have found that ROA, which is a measure of profitability, has a direct relationship with expense ratio, but an indirect relationship with net claim. And also, liquid asset technical reserve and combined ratio are no relationship with ROA. Net premium has an indirect relationship with a loss ratio. Conclusion: Return on Assets (ROA) was taken as a dependent variable and expense ratio (EX), combined ratio (CR), LATR, NIIR and net claim consider as independent variables. The results of the study indicate that there was a significant relationship between expense ratio and ROA, and NII ratio and ROA, and NC and ROA in the listed insurance companies in Sri Lanka. The study recommends that claims managers in the Sri Lankan insurance industry must effectively manage their claim process. In addition to that, carefully attention must also be given to administrative cost, underwriting cost, which is capable of reducing company’s profit margin.
The Impact of Covid-19 Pandemic on Financial Performance of the Insurance Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Shamali, K.D.; Weerasinghe, W.D.J.D.
Purpose: The primary objective of this study is to determine the impact of Covid-19 pandemic on the financial performance of the insurance companies listed on the Colombo Stock Exchange (CSE). Design/Methodology/Approach: This research study is quantitative research, and it follows the deductive approach. There are 27 companies in the Insurance sector however, there are 8 companies listed on the CSE. This study relating data were collected using the published annual reports for the period from 2015 to 2021. The secondary data were analyzed using descriptive statistics, the normality test, and the Wilcoxon signed rank test. Before and during the COVID- 19 pandemic, the liquidity ratio (LR), leverage ratio (LVR), Earning per Share (EPS), return on equity (ROE) and return on assets (ROA) were all measured individually in order to arrive at distinct results for those parameters. Findings: The findings indicated that the Covid-19 pandemic had a major negative impact on the Return on Assets and Return on Equity of the insurance companies. However, there had no meaningful impact on the leverage ratio and liquidity ratio during COVID-19 pandemic. Originality: Investors or potential investors should use the study's findings as a source of useful information when making investment decisions and managers can use this research to change or create long time decisions.
Impact of Cryptocurrency on the Stock Market Performance in Sri Lanka: An Empirical Study Based on Ethereum
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Samadhi, K.U.; Weerasinghe, W.D.J.D.
Introduction: Cryptocurrencies are becoming increasingly popular as an investment product with incredible returns and high risks. In recent time, numerous researchers have investigated about the relationship or correlation between cryptocurrencies and the stock market under different factors and situations. However, attention is not drawn to the impact of cryptocurrency and stock markets in the Sri Lankan context. Thus, the purpose of this study is to examine the impact of cryptocurrency on the stock market performance in Sri Lanka. This study specifically focused on Ethereum (ETH), which was ranked as second largest coin of total market capitalization. Methodology: The analysis uses the data of ETH price Returns, ETH volume, and ASPI Returns, as well as S&P SL20 returns for the period 2015-2023 on a weekly basis. The VEC (03) model is employed in the study’s quantitative research methodology to evaluate the impact of cryptocurrency on stock market performance in Sri Lanka. Findings: According to the results, there is no short-term impact, but there is a long-term impact of cryptocurrency on stock market performance in Sri Lanka. Further, there is a somelevel of impact of Ethereum on ASPI return and S&P SL 20 return. Conclusion: This study contributes valuable insights to the field, providing a context-specific understanding of how cryptocurrency dynamics, particularly Ethereum, can influence traditional stock market performance in Sri Lanka. The implications of these findings extend to a diverse array of stakeholders, including investors, policymakers, financial institutions, and researchers.
Impact of Cryptocurrency on the Stock Market Performance in Sri Lanka: An Empirical Study Based on Ripple (Xrp)
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Subasinghe, S.A.D.S.; Weerasinghe, W.D.J.D.
Introduction: In the global financial markets, cryptocurrency has secured a distinct position, especially after its rapid growth and expansion. In recent times, numerous scholars have investigated the relationship between cryptocurrencies and the stock markets in different regions. Over the past three years, Sri Lanka's journey toward recovery from the global pandemic and economic crisis has opened the doors to cryptocurrency, with a growing trend of using it as an alternative investment. This study investigated the impact of cryptocurrency on the stock market performance in Sri Lanka, with a specific focus on XRP (Ripple). Methodology: The analysis uses the data of XRP price returns, XRP volume, and ASPI returns, as well as S&P SL20 returns for the period 2013-2023. The analytical methods involve time series data regression techniques using E-Views software. The GARCH (1,1) model is employed methodology to evaluate the impact of cryptocurrency on stock market performance in Sri Lanka. Findings: The results suggest that there is a weak positive relationship between XRP returns and both ASPI returns and S&P SL20 returns. Additionally, ASPI returns, and S&P SL20 returns are not statistically significant indicating that there is no impact of XRP on stock market performance in Sri Lanka. Conclusion: The research serves as a basis for policy decisions for regulators, investors, and academics regarding the cryptocurrency market. Furthermore, future studies should consider a wider range of cryptocurrencies and explore the impact of Bitcoin Futures to gain a deeper understanding of the connections between cryptocurrencies and stock indices.
The Impact of Dividend Policy on Stock Price Volatility: Evidence from Manufacturing Sector and Capital Good Sector in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Nisansala, B.D.S.; Weerasinghe, W.D.J.D.
Introduction: This study was investigated the impact of dividend policy on stock price volatility in manufacturing sector and capital good sector listed in Colombo stock exchange in Sri Lanka using panel data regression. Design/Methodology/Approach: Data gathered from 12 manufacturing and 12 capital good sector from 2011/12 to 2020/21. Descriptive statistic, Correlation analysis and panel data regression employed to identify the relationship between the predictor variables and dependent variable. Dividend yield a (Dyt, DYt-1) and Pay Out Ratio (PORt, PORt-1) were used as independent variables and firms’ size and Asset growth were used as control variables. Stock Price Volatility (PVOL) was use as dependent variable in this study. Findings: In manufacturing sector enterprises in Sri Lanka, DYt and PORt-1 is positively significant at the 5% probability level and PORt and GROWTH is negatively significant, further, DYt-1 are negatively insignificant, and SIZE is positively insignificant at this study. According to the overall panel regression model. In Sri Lanka, there are four variables are significant variables affecting manufacturing enterprises after using random effect model. DYt has a significant negative connection with PVOL in Sri Lankan capital goods companies, according to the overall panel regression model. In Sri Lankan capital goods companies, DYt-1, POR, PORt-1, SIZE, ASSET GROWTH are all positively insignificant when it comes to PVOL. In addition, the similarities and differences of PVOL adopted by manufacturing and capital goods sector organizations in Sri Lanka explored in this study. Conclusion: The research fills a gap in the literature and achieves the study's goals. Future research on dividend policy will benefit from these insights.
The Impact of E-Banking on Customer Satisfaction in Sri Lankan Banking Industry
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Wijewardana, H.K.G.I.A.; Weerasinghe, W.D.J.D.
Introduction: E-banking concept came to the society in mid-1990 but Sri Lanka took more time to adept this concept and today it has become a trend. Therefore, banks should more consider customer satisfaction in e banking. Hence this study was conducted with main objective of examining the impact of e banking on customer satisfaction in Sri Lankan banking industry. Design/Methodology/Approach: A questionnaire was used to collect data from the customers and convenient sampling technique was used. Therefore, Customers are selected from the systemically important banks and 150 customers filled the questionnaire and 25 customers from each bank were selected randomly. Five service quality dimensions (Reliability, responsiveness, assurance, tangibility and empathy) are independent variables and customer’s satisfaction is the dependent variable. Findings: Reliability, assurance and tangibility are significant with customer satisfaction with e banking. But responsiveness and empathy are not significant with customer satisfaction with e banking. However, over all model significant at 1% level and there is a strong relationship between dependent and independent variables. Conclusion: It leads to conclude that customers are satisfied with the service provided in e banking. Banks should give more consideration on reliability assurance and empathy. As well, bankers should get another effort to improve that satisfaction and become they are loyal.
The Impact of Exchange Rate Volatility on Profitability of the Insurance Industry in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Weerasinghe, W.M.Y.P.; Weerasinghe, W.D.J.D.
Design/Methodology/Approach: The study is a quantitative study taking 10 insurance companies operating in Sri Lanka as the sample. The companies were selected based on the data availability during the time period from 2012 to 2021. Following data are collected from secondary sources, Return on Assets (ROA), Exchange rates, Inflation rate, Annual GDP growth rate, Population growth rate, and Interest rate for this study. Exchange Rate Volatility used as independent variable and Inflation Rate, GDP Annual Growth Rate, Population Growth Rate, and Interest Rate use as the Control Variables. Return on assets used as dependent variables to measure the firm performance. The descriptive statistic, correlation analysis and regression equation are used for the purpose of analysing data. Findings: According to the findings of this study, overall, a negative impact of exchange rate volatility on ROA is shown. Further, the annual population growth rate, interest rate, GDP growth rate and inflation rate have a significant negative impact on ROA. Originality: The findings of this study can help the decision makers to be aware of the importance of Exchange rate volatility on improving the insurance firm’s performance to improve their competitive edge.
Impact of Financial Literacy on Financial Risk Tolerance in the Context of Investment Decision-Making: Empirical Evidence from Individuals in Gampaha District
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Siriwardena, H.D.H.K.; Weerasinghe, W.D.J.D.
Purpose: This study aims to examine the impact of financial literacy and demographic characteristics on the financial risk tolerance of the individuals in the Gampaha District, Sri Lanka. Design/Methodology/Approach: The study used deductive approach. The population of this study is comprised of 380 individuals in Gampaha District. The study used primary sources of data and data was collected using a close-ended questionnaire. Altogether 320 responses were collected while having an 84 percent of respondent rate. The descriptive statistics, correlation analysis and multiple regression model were used to analyze the data. Findings: The findings of the empirical analysis revealed that financial literacy and demographic characteristics such as age, gender, marital status, highest educational level, income and wealth are significant in determining the financial risk tolerance. It was evident that majority of respondents in Gampaha district make investment decisions by their own. Another important finding is that average financial literacy of a person in Gampaha district is 56.88%. Further, it was revealed that there was a strong positive relationship between financial literacy and financial risk tolerance level. The results prove that increasing people's financial literacy through various educational programmes is likely to increase demand for financial products with varying risk profiles. Originality: The study recommends that there should be a greater emphasis on financial education programme for enhancing the financial awareness among individuals in Gampaha district that positively impacts the risk tolerance level.
Impact of Firm Characteristics and Macroeconomic Factors on Financial Performance: A Study of Selected Listed Materials Firms in Sri Lanka
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Fernando, B.S N.; Weerasinghe, W.D.J.D.
Introduction: The purpose of this study is to explore the interrelationship between firm characteristics, macroeconomic factors, and financial performance of listed material firms in Sri Lanka before and after Covid19 pandemic. Data methodology: The study used the ex post facto research design. The population comprised all quoted firms on the Colombo Stock Exchange. The sample was restricted to companies in the material firms’ sector, selected using cluster sampling method. The study used multiple linear regression as the method of validating the hypotheses. To have a better idea on the impact of the firm characteristics and macro-economic factors on the firm performance study has employed four regression models. Specifically, the study investigates the impact of firm size, leverage liquidity and sales growth rate while macroeconomic factors were interest rate, inflation rate, exchange rate and GDP growth rate. The dependent variables that measure the firm’s performance are measured as return on assets (ROA) and return on equity. Findings: It was concluded that the explanatory variables which are firm characteristics (firm size. Leverage, liquidity, sales growth rate) and macroeconomic factors (interest rate, inflation rate, exchange rate and GDP growth rate) were not significantly associated with the dependent variable of ROA and ROE before and after Covid19 pandemic. Conclusion: In conclusion, the study concluded that firm characteristics and macroeconomic factors have no significant impact on firm performance in listed material firms in Sri Lanka. For further research variables such as shifts in governance, clearness, and the dynamic business environment could obtain a critical understanding of how firm characteristics and macroeconomic factors impact firm performance.
The Impact of Firm Characteristics and Macroeconomic Factors on the Firm Performance: Special Reference to Listed Capital Goods Firms in Sri Lanka
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Fernando, K.P.D.; Weerasinghe, W.D.J.D.
Introduction: This research investigates the dynamic interplay between firm specific characteristics and macroeconomic factors, and their impact on firm performance of capital good firms in Sri Lanka combining with the Covid 19 impact. The study aims to provide a comprehensive understanding of the intricate relationships that shape the performance, growth, and resilience of capital goods firms within the unique economic landscape of Sri Lanka. Methodology: The population was listed industrial firms in Sri Lanka. The sample was listed capital good firms in Sri Lanka. Panel regression employed to evaluate the hypothesizes. Data analyses were done in two scenarios (prior to Covid 19 and post Covid 19). Firm characteristics are firm size, leverage, liquidity, sales growth. Macroeconomic variables are interest rate, inflation rate, exchange rate and GDP growth rate. Research data were analyzed using multiple regression model. Findings: Before the Covid, liquidity and sales growth positively affected both ROE and ROA while interest rate and leverage negatively affected to ROE. Further, liquidity and sales growth are positive and significant. Leverage, interest rate, inflation rate, and exchange rate are negatively to ROA. Nevertheless, after the Covid, liquidity and exchange rate positively affected both ROE while only leverage affected negatively on ROA. Conclusion: Over time, these have impeded the performance of capital-good firms, yet the relationship between these factors and firm characteristics impacts firm performance. Because finance and liquidity decisions fall solely under the manager's control. Thus, it becomes necessary to present data regarding the relationship that exists between macroeconomic variables, firm characteristics, and financial performance in developing countries such as Sri Lanka.