South Asian Journal of Finance

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Subject: search.filters.subject.Corporate Governance

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    Corporate Governance and Stock Liquidity: Evidence from Listed Companies in Sri Lanka
    (Department of Finance, University of Kelaniya., 2024) Weerasinghe, W. S.
    Purpose: This study aims to investigate the relationship between corporate governance and stock liquidity in listed companies in Sri Lanka. Design/Methodology/Approach: Corporate governance was evaluated using an index constructed of the board of directors, audit committee, remuneration committee, nomination committee, related party transaction review committee, frequency of meetings, and gender diversity. Stock liquidity was measured using the Amihud illiquidity ratio. A Quantitative research study was performed based on the data collected from 100 Sri Lankan listed companies excluding companies in the Banking, Finance, and Insurance sectors due to its inherent nature of being highly regulated. Findings: It was found that the mean (median) values of corporate governance of Sri Lanka are 0.706 (0.714) and the mean (median) values of stock illiquidity are 0.839 (0.379). The results of the correlation and regression analysis revealed that a weak association between corporate governance and stock liquidity relationship. Therefore, this study concludes that corporate governance has no significant impact on stock liquidity. Nonetheless, this study analyzed a limited sample of 100 companies, focusing primarily on board and its committee-related corporate governance attributes. Originality: This study provided new insights into relationship between corporate governance and stock liquidity which has a practical significance for managers, shareholders, investors, traders, financial analysts, and policy makers in Sri Lanka. It introduces a novel corporate governance index tailored specifically to Sri Lankan companies highlighting its potential improve the stock liquidity at both the company and market levels which will ultimately lead the country towards economic growth.
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    Board Characteristics and Intellectual Capital Disclosures: Evidence from Sri Lanka
    (Department of Finance, University of Kelaniya., 2021) Chandraratne, K. A. D. P. M.; Pathirawasam, C.; Mohamed, M. S.
    Purpose: The purpose of this study is two-fold. First, to examine the state of intellectual capital disclosures. Second, to investigate the relationship between board characteristics and intellectual capital disclosures. Design: This study selected thirty non-financial listed companies with the highest market capitalization from the Colombo Stock Exchange in Sri Lanka. An intellectual capital disclosure index comprising 61 items was developed to understand the level of intellectual capital disclosure in the selected companies. Panel data analysis techniques were applied to test the proposed hypotheses. Findings: Results indicated that role duality and proportion of female directors have a significant and positive impact on intellectual capital disclosures. Firm leverage was found to have a significant and negative effect on intellectual capital disclosures. Insufficient empirical evidence between other corporate board characteristics and intellectual capital disclosure in Sri Lanka may be attributed to a non-mandatory corporate disclosure environment. Originality: This is among the few studies to examine the link between corporate governance and intellectual capital disclosures employing panel data in Sri Lanka. However, a discourse on the role of corporate governance and corporate disclosures is warranted in a small island developing economy with a fragile financial system like Sri Lanka. Future Research Directions – The study calls for more studies to investigate the relationship between corporate governance and intellectual capital disclosures in the case of Sri Lanka by employing data from different industries for longer periods.