10th Students' Research Symposium 2021
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/24956
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Item Financial Stability and Economic Growth: Evidence from South Asian Region(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Rajapaksha, R.S.D.S.D.; Perera, L.A.S.Introduction: This study investigates the impact of financial stability on economic growth in south Asian region. For this purpose, researcher had employed panel data analysis for the period of 2010 to 2020 and for 6 south Asian countries. Design/Methodology: To measure the impact on economic growth study used Gross Domestic product as the dependent variable and Ratio of regulatory capital to risk-weighted assets, Ratio of non-performing loans to gross loans, Ratio of liquid assets to total assets and Ratio of return on assets used as independent variables. Financial depth, Consumer Price Index, Population and Trade openness used as control variables. Researcher used fixed effect model for analysis data. Findings: The study revealed there is no significant impact between the Ratio of regulatory capital to risk-weighted assets, Ratio of non-performing loans to gross loans, Ratio of liquid assets to total assets on GDP. Ratio of return on assets has negative impact on GDP. Population and Trade openness have positive significant relationship to the Gross Domestic product. Consumer price index shows insignificant impact to the Gross Domestic Product. Financial depth shows significant negative relationship to the gross domestic product. Conclusion: This study concludes there is no significant impact from financial stability on economic growth in south Asian countries.Item Impact of Firms Specific Factors & Macroeconomic Factors on Debt Financing: Evidence from Capital Goods, Consumer Service and Foods Beverage & Tobacco Sectors in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Pankaja, H.P.H.; Perera, L.A.S.Introduction: The purpose of this study is to identify the impact of firms' specific factors and macroeconomic factors which determine the level of debt financing over equity financing of the capital goods, consumer service, and food, beverage, and tobacco sectors in Sri Lanka. Design/Methodology/Approach: Pecking order theory, agency theory, and trade off theory are taken to explain the relationship between debt financing. The population of the research is twenty sectors and two hundred and twenty-five non-financial companies listed on the Colombo stock exchange (CSE) in Sri Lanka. We are only focusing on 3 sectors, including 15 non-financial companies, selected for the sample, based on the market capitalization and using annual reports from the year 2011 to 2020 as the sample period of this research. A Panel Regression is performed using the E-Views 10 and Stata 13 software to analyses the calculated ratios for each factor. Findings: Based on the findings of a study involving a number of variables, the firm's leverage is negatively related to its performance and interest rates, but agency cost of debt, tangibility, liquidity, sales growth, non-debt tax shield, and inflation rate are all positively related to leverage. Furthermore, it found that firm performance and interest rate number have a negative significant effect on the dependent variable, liquidity, inflation rate have a positive significant effect on the dependent variable, while all other variables are insignificant to the model. Agency cost, tangibility, sales growth, non-debt tax shield, firm age, and size of the firm are not in line with the hypotheses developed. Conclusion: Evidence from past research is found to be proven with the results generated. This study contributes to enhancing the existing literature through analyzing the impact of factors on debt financing in non-financial companies listed in Sri Lanka.Item Impact of Firm Characteristics and Macroeconomic Variables on Liquidity Risk of Listed Commercial Banks in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Anurasiri, H.M.M.H; Perera, L.A.S.Introduction: In this study, researcher make an effort to identify the nature of the impact of firm characteristics and macroeconomic variables on liquidity risk of banking sector in Sri Lanka by using 9 listed commercial banks. Design/Methodology/Approach: The study is a basic research and it aims to conduct a quantitative research by using deductive approach and designed on casual research by empirically testing the impact of 9 independent variables on liquidity risk of listed commercial banks in Sri Lanka and used Random-Effect Panel data Regression method to analyze the data. Findings: Leverage, Net Interest Margin, Bank Size, Interest Rate and Exchange Rate show a significant impact on Liquidity Risk of Listed commercial banks in Sri Lankan context and at the same time; Capital Adequacy Ratio, Non-Performing Loans, Return on Assets, and Inflation show an insignificant impact. Conclusion: Findings of this paper will help banks’ managers to reduce liquidity risk and keep their banks at a better liquidity position.Item Covid-19 Pandemic and Industry Group Performance of the Colombo Stock Exchange(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Ramanayake, D.C.; Perera, L.A.S.Introduction: This research study examines the impact of the lockdown announcement imposed by the government on the different leading industry groups of the CSE such as Health Care Equipment and Services, Banks, Energy, Capital Goods, Transportation, etc. Design/Methodology/Approach: Event study methodology has been employed to analyze the data. Lockdown declaration day has been considered as the event date for this study. I have taken a 40-trading day event window, i.e., 20 trading days before and 20 trading days after the date of the announcement. Secondary data is used in the study and the same is collected from the CSE data library. Using MS-Excel, three models have applied for analysis—mean-adjusted, market-adjusted, and risk-adjusted abnormal return. Findings: In the initial lockdown analysis, on the date of announcement, all the industries show negative abnormal returns under the mean adjusted abnormal return model. Three industry groups (Energy, consumer services and insurance) show positive impressive abnormal return at a significant level under the market adjusted abnormal return model. Conclusion: Most of the sectors performed positively and gained abnormal returns after the announcement of lockdown. It showed that these sectors steeply recovery after falling down the market index. That is indicate that investors were confident that the impact was occur due to the abnormal situation of the market and not due to the fault or issue of these industries. Based on the findings, investors may decide to hold their investments in the stock market that has recovered during the period. This is the first study to analyze the impact of the announcement of lockdown due to Covid-19 on the industry group performance using the event study method in the context Colombo Stock Exchange.Item The Environmental Disclosure Practices and Firm Performance: Evidence from Manufacturing Sector in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Lakshani, E.A.A.; Perera, L.A.S.Introduction: This research study aims to identify how the environmental disclosure practices influence the firm performance with the moderating effect of environmental performance. Design/Methodology/Approach: The Sample of the study consist with of 15 listed companies in manufacturing industry in Sri Lanka which will mainly focus on the financial years of 2014 to 2020. Also, it is expected to collect data relating to environmental disclosure with the help of an environmental disclosure index developed by Clarkson et al. (2008) and the data will be collected from the annual reports and the sustainability reports of the companies in the sample. Using the correlation and regression analysis it has been tested whether there is a direct relationship between the environmental disclosure and the firm’s financial performance through this research study. Further, it has also been performed an interaction effect of regression analysis to study the moderating effect of environmental performance on the direct relationship between environmental disclosure and firm market value. Findings: As per the findings of this study it was revealed that there is an insignificant positive relationship between environmental disclosure and ROE as well as an insignificant negative relationship between environmental disclosure and ROS. Therefore, it can be concluded that there is no systematic relationship between environmental disclosure and firm performance. Moreover, no significant moderating effect of environmental performance was identified from this research study. Conclusion: The results indicated that there was no systematic relationship between the environmental disclosure and firm performance since the correlation is not significant. As an additional analysis, a panel regression was run, and it also indicated a positive relationship between environmental disclosure with respect to the ROE and ROS.Item Impacts of Debt financing decisions on Firms financial performance: Empirical study on listed material and consumer service companies in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Pirabaharan, A.; Perera, L.A.S.Introduction: The purpose of this study is to examine the impacts of debt financing decisions on firm financial performance in listed consumer service and material companies in Sri Lanka. This is done through investing and evaluating the debt financing decisions of listed consumer service and material companies in Colombo Stock Exchange. Design/ Methodology/Approach: The research approach is based on empirical research, drawing from annual financial statements for the period from 2014/2015 to 2020/2021. Return on assets, Short-term debt to total assets, Long-term debt to total assets, Total debt to total assets, Firm size in material and consumer service companies are considered as variables in this study. Moreover, Panel regression models use to analyze the relationship between debt financing decisions and firm financial performance. Findings: The finding revealed that there is a significant negative relationship between Long-term debt to total assets, Short-term debt to total assets and Return on assets in consumer service companies. Moreover, there is a significant positive relationship between Long-term debt to total assets and return on assets in material companies. However, Total debt to total assets are negatively and significantly impacts the Return on assets. Conclusion: The results of this study suggest that the Debt financings are positively and negatively impact the Firms financial performance in the listed consumer service and material companies in Sri Lanka.Item Return Spillovers Among Equity Markets with Relate to Covid-19 Pandemic: Evidence from Asian Region(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Hashani, R.L.C.; Perera, L.A.S.Introduction: This study aims to investigate equity market return spillover effects among three Asian countries Namely, Sri Lanka, China, and India. Design/Methodology/Approach: The weekly closing prices were considered from the period starting from January 2015 to December 2021. This study uses the VAR and GARCH models to investigate spillover effects among the selected three equity markets. Findings: In the pre-pandemic episode there is a Uni-directional spillover flowing from China to Sri Lanka and own return spillover effects from Sri Lanka. This result has been confirmed by both VAR and GARCH model and further by Granger Causality test. When analyzing the results during the pandemic, there are significant statistical evidence for Uni-directional return spillover flowing from China to India according to both models employed in this study. Conclusion: When analyzing pre-pandemic and during pandemic, China shows strong influential impact towards the other Asian equity markets under study implying that other countries’ returns are dependent upon the return of Chinese stock market. India and Sri Lanka do not show any influence towards other equity market.Item The Determinants of Life and General Insurance Demand in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Abesekara, M.S.; Perera, L.A.S.Introduction: The main purpose of this study is to identify how macroeconomic, demographic and socioeconomic factors affect the life and general insurance demand in Sri Lanka and the most significant factors affecting life and general insurance demand in Sri Lanka. Design/Methodology/Approach: Income, education, inflation, urbanization, and finance sector development are used as independent variables and life and general insurance density are the dependent variables of this study. This research uses secondary data, and the sample of this study is the years 2000 to 2019. These data are collected from different sources. analyzing method of this study is multiple regression analysis Findings: income, urbanization has a significant effect on life insurance demand in Sri Lanka. Income, urbanization and finance sector development have a significant effect on the general insurance demand in Sri Lanka. Education, inflation are insignificant for both life and general insurance demand in Sri Lanka. Conclusion: Income level and urbanization have a significant effect on both life and general insurance demand in Sri Lanka. So, increasing income levels and urbanization will be helpful for increase the insurance demand of the country. Also, insurance companies can focus on high-income people and people who live in urban areas to increase their insurance product sales. Developing the finance sector of the country will help develop the general insurance industry of the country.