Skip to main content
placeholder image

Capital structure and firm performance in emerging economies: An empirical analysis of sri lankan firms

Journal Article


Abstract


  • This paper offers an empirical analysis of the impact of capital structure on firm performance in the context of an emerging market-Sri Lanka. The study applies both pooled and panel data regression models for a sample of 155 Sri Lankan-listed firms. The results demonstrate that most of the Sri Lankan firms finance their operations with short-term debt capital as against the long-term debt capital and provide strong evidence that the firm performance is negatively affected by the use of debt capital. The study also finds a significant negative relationship between tangibility and performance indicating inefficient utilization of non-current assets. The negative performance implications associated with over-utilization of short-term debts and the under-utilization non-current assets provide corporate managers with useful policy directions.

UOW Authors


Publication Date


  • 2011

Citation


  • Manawaduge, A., De Zoysa, A., Chowdhury, K., & Chandarakumara, A. (2011). Capital structure and firm performance in emerging economies: An empirical analysis of sri lankan firms. Corporate Ownership and Control, 8(4 C), 253-263. doi:10.22495/cocv8i4c2art2

Scopus Eid


  • 2-s2.0-84897145338

Web Of Science Accession Number


Start Page


  • 253

End Page


  • 263

Volume


  • 8

Issue


  • 4 C

Place Of Publication


Abstract


  • This paper offers an empirical analysis of the impact of capital structure on firm performance in the context of an emerging market-Sri Lanka. The study applies both pooled and panel data regression models for a sample of 155 Sri Lankan-listed firms. The results demonstrate that most of the Sri Lankan firms finance their operations with short-term debt capital as against the long-term debt capital and provide strong evidence that the firm performance is negatively affected by the use of debt capital. The study also finds a significant negative relationship between tangibility and performance indicating inefficient utilization of non-current assets. The negative performance implications associated with over-utilization of short-term debts and the under-utilization non-current assets provide corporate managers with useful policy directions.

UOW Authors


Publication Date


  • 2011

Citation


  • Manawaduge, A., De Zoysa, A., Chowdhury, K., & Chandarakumara, A. (2011). Capital structure and firm performance in emerging economies: An empirical analysis of sri lankan firms. Corporate Ownership and Control, 8(4 C), 253-263. doi:10.22495/cocv8i4c2art2

Scopus Eid


  • 2-s2.0-84897145338

Web Of Science Accession Number


Start Page


  • 253

End Page


  • 263

Volume


  • 8

Issue


  • 4 C

Place Of Publication