The main purpose of this study is to examine the impact of ownership structure on earnings management considering listed firms at the Colombo Stock Exchange-Sri Lanka during the period of 2013/14 to 2017/18. Earnings management is measured using discretionary accruals as a proxy based on Kothari, Leone and Wesley (2005) performance adjusted discretionary accrual model, while taking into account the four types of ownership structures, viz, ownership concentration, managerial ownership, institutional ownership and foreign ownership. The study employed pooled OLS regression. The findings of the study reveal that managerial and institutional ownership structures are effective in constraining accruals manipulations. Conversely, foreign ownership is found to have a significantly positive association with earnings management. The outcomes of the paper further widen the literature related to understanding the influences of ownership structure on earnings management in the context of emerging economies.
Capital structure is a very significant area in strategic financial decision making of firms. Several factors, both internal and external, influence a firm's choices of capital structure. It is found that the research on this topic has mainly covered industrialized countries. Very little is known about the decision-making process on capital structure of firms in developing countries. The aim of this study is to investigate for the period 2000-2013, using panel data, the role of long-run effect of country-specific factors, such as prime lending rate, rate of inflation, gross domestic product (GDP) growth, size of capital market, corporate tax and civil unrest on capital structure choices among Sri Lankan firms listed in Colombo Stock Exchange (CSE).
This research paper aims at examining the determinants of the Speed of Adjustment (SOA) towards the target capital structure of near and off target firms in Sri Lanka. Particularly, it analyses the impact of not only firm-specific factors but also corporate governance factors on target capital structure. The methodology utilizes the benefits of the partial (stock) adjustment model, viz, two step Generalised Method of Moments (GMM) to determine the SOA to target capital structure. The results indicate that there is discernible concrete evidence of dynamic behaviour of capital structure in Sri Lanka. This confirms the applicability of dynamic trade-off theory. The near or off target firms' capital structure adjustment exhibits significant difference in SOA between the two types, implying that off target firms adapt swiftly vis-à-vis those at the doorstep of target firms, in each of the three models. There is a clear indication of both firm related factors and corporate governance factors swaying capital structure adjustment in at least one of the measures of leverage in both situations, very near to and far off from optimum level of debt.
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