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Capital Structure And Firm Performance In Emerging Economies: An Empirical Analysis Of Sri Lankan Firms, Anura De Zoysa, Muhammad Chowdhury, Palli Mulla K A Chandrakumara, Athula Manawaduge
Capital Structure And Firm Performance In Emerging Economies: An Empirical Analysis Of Sri Lankan Firms, Anura De Zoysa, Muhammad Chowdhury, Palli Mulla K A Chandrakumara, Athula Manawaduge
Anil Chandrakumara
This paper offers an empirical analysis of the impact of capital structure on firm performance in thecontext of an emerging marketÿSri Lanka. The study applies both pooled and panel data regressionmodels for a sample of 155 Sri Lankan-listed firms. The results demonstrate that most of the SriLankan firms finance their operations with short-term debt capital as against the long-term debtcapital and provide strong evidence that the firm performance is negatively affected by the use of debtcapital. The study also finds a significant negative relationship between tangibility and performanceindicating inefficient utilization of non-current assets. The negative performance implicationsassociated with over-utilization of …
Political Connections, Founding Family Ownership And Leverage Decision Of Privately Owned Firms, Qigui Liu, Gary Tian
Political Connections, Founding Family Ownership And Leverage Decision Of Privately Owned Firms, Qigui Liu, Gary Tian
Qigui Liu
In this paper, we examine the effect of political connections versus founding family ownership on the relationship between disproportional ownership structure and leverage decisions of privately owned firms listed in Chinese market. We find that disproportional ownership has positive effect on leverage, indicating that controlling shareholder tends to use both disproportional ownership structure and debt to expropriate. We also find that the interacted term between disproportional ownership and political connections has a positive impact on leverage ratio, and disproportional ownership structure is negatively related with leverage ratio of founding-family controlled firms, which indicate a substitute effect between political connections and …