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Corporate governance and financing choices in firms: a panel data analysis of Sri Lankan companies / Saseela Balagobe

An important financial decision facing firms is the choice between debt capital and equity capital. The financial structure of a firm is a specific mixture of debt and equity the firm uses to finance its operations. The financing choice of firms is crucial for any business organization. This paper i...

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Main Author: Balagobe, Saseela
Format: Article
Language:English
Published: Accounting Research Institute (ARI), Universiti Teknologi MARA (UiTM) 2020
Subjects:
International finance
Investment, capital formation, speculation
Online Access:https://ir.uitm.edu.my/id/eprint/41868/1/41868.pdf
https://ir.uitm.edu.my/id/eprint/41868/
https://apmaj.uitm.edu.my
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spelling my.uitm.ir.418682022-07-05T07:11:01Z https://ir.uitm.edu.my/id/eprint/41868/ Corporate governance and financing choices in firms: a panel data analysis of Sri Lankan companies / Saseela Balagobe Balagobe, Saseela International finance Investment, capital formation, speculation An important financial decision facing firms is the choice between debt capital and equity capital. The financial structure of a firm is a specific mixture of debt and equity the firm uses to finance its operations. The financing choice of firms is crucial for any business organization. This paper investigated how corporate governance indicators such as board size, board independence, CEO duality and board meetings impact on financing choice of firms. Panel data covering a five year period from 2012 to 2016 from twenty six listed firms on the Colombo Stock Exchange (CSE) was used. Analysis was done within the Random-effects GLS regression framework. The findings reveal that organizations with larger board sizes employ more debt irrespective of the maturity period in order to raise corporate value. Further, other corporate governance variables such as board independence, CEO duality and board meetings are not found to have a significant impact on short term and long term leverage. The firms should increase their board size for accessing more debt capital as a large board size puts pressure on managers through stringent monitoring and regulatory mechanisms to increase the value of a firm. However beyond a certain level, further increase in board size could lead to adverse effects. Therefore, this study recommends a policy that may strike a good balance between quality and quantity of board size. Accounting Research Institute (ARI), Universiti Teknologi MARA (UiTM) 2020-04 Article PeerReviewed text en https://ir.uitm.edu.my/id/eprint/41868/1/41868.pdf Corporate governance and financing choices in firms: a panel data analysis of Sri Lankan companies / Saseela Balagobe. (2020) Asia-Pacific Management Accounting Journal (APMAJ), 15 (1). pp. 98-113. ISSN 2550-1631 https://apmaj.uitm.edu.my
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic International finance
Investment, capital formation, speculation
spellingShingle International finance
Investment, capital formation, speculation
Balagobe, Saseela
Corporate governance and financing choices in firms: a panel data analysis of Sri Lankan companies / Saseela Balagobe
description An important financial decision facing firms is the choice between debt capital and equity capital. The financial structure of a firm is a specific mixture of debt and equity the firm uses to finance its operations. The financing choice of firms is crucial for any business organization. This paper investigated how corporate governance indicators such as board size, board independence, CEO duality and board meetings impact on financing choice of firms. Panel data covering a five year period from 2012 to 2016 from twenty six listed firms on the Colombo Stock Exchange (CSE) was used. Analysis was done within the Random-effects GLS regression framework. The findings reveal that organizations with larger board sizes employ more debt irrespective of the maturity period in order to raise corporate value. Further, other corporate governance variables such as board independence, CEO duality and board meetings are not found to have a significant impact on short term and long term leverage. The firms should increase their board size for accessing more debt capital as a large board size puts pressure on managers through stringent monitoring and regulatory mechanisms to increase the value of a firm. However beyond a certain level, further increase in board size could lead to adverse effects. Therefore, this study recommends a policy that may strike a good balance between quality and quantity of board size.
format Article
author Balagobe, Saseela
author_facet Balagobe, Saseela
author_sort Balagobe, Saseela
title Corporate governance and financing choices in firms: a panel data analysis of Sri Lankan companies / Saseela Balagobe
title_short Corporate governance and financing choices in firms: a panel data analysis of Sri Lankan companies / Saseela Balagobe
title_full Corporate governance and financing choices in firms: a panel data analysis of Sri Lankan companies / Saseela Balagobe
title_fullStr Corporate governance and financing choices in firms: a panel data analysis of Sri Lankan companies / Saseela Balagobe
title_full_unstemmed Corporate governance and financing choices in firms: a panel data analysis of Sri Lankan companies / Saseela Balagobe
title_sort corporate governance and financing choices in firms: a panel data analysis of sri lankan companies / saseela balagobe
publisher Accounting Research Institute (ARI), Universiti Teknologi MARA (UiTM)
publishDate 2020
url https://ir.uitm.edu.my/id/eprint/41868/1/41868.pdf
https://ir.uitm.edu.my/id/eprint/41868/
https://apmaj.uitm.edu.my
_version_ 1738513890971484160
score 13.211869

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