The Determinants of Capital Structure: Evidence from Selected Listed Companies in Sri Lanka

Pratheepan, Thuraiyappah; Banda, Y. K. Weerakon

doi:10.5539/ijef.v8n2p94

Cited by 26 publications

(28 citation statements)

References 34 publications

(35 reference statements)

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“…Pecking order theory also posits that with information asymmetry, higher growth opportunities in a firm means higher risks and hence such firm has the chance in raising debt. However, Smith and Watts (1992) and Pratheepan and Banda (2016) argue contrary that firms with higher growth opportunities will have low debt as capital.…”

Section: Pecking Ordermentioning

confidence: 98%

Determinants of working capital requirement in listed firms: Empirical evidence using a dynamic system GMM

Nyeadi¹,

Sare²,

Aawaar

2018

Cogent Economics & Finance

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Working capital management is a critical element in the survival of every firm. While the effective management of working capital leads to value creation in firms, ineffective management of working capital, on the other hand, does not only destroy value but can lead to the eventual solvency of the firm. The search for the factors that influence working capital management has, therefore, become a worthwhile exercise embarked upon by both managers and scholars. The main aim of this study is thus to empirically investigate the determinants of working capital requirement on the listed firms in Ghana. In examining the determinants of working capital requirements, 28 firms listed on the Ghana Stock Exchange were used for a time period of 8 years, spanning from 2007 to 2014. The study employed a dynamic panel system of General Methods of Moments (GMM) to test the hypotheses. This estimator has the ability to produce consistent and unbiased results when even there is an endogeneity in the model. This, therefore, makes our results more efficient and reliable. First, the study suggests that working capital in Ghanaian firms is determined by profitability, age, sales growth, GDP growth, operating cycles and leverage. Second, it is realized that while age, profitability and operating cycle strongly impacts positively on working capital, GDP growth, sales growth and leverage inversely correlate with working capital.

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Section: Pecking Ordermentioning

confidence: 98%

Determinants of working capital requirement in listed firms: Empirical evidence using a dynamic system GMM

Nyeadi¹,

Sare²,

Aawaar

2018

Cogent Economics & Finance

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“…Gomez et al (2014) found the fact that profitability had a negative and significant effect on capital structure variable. This finding was further strengthened by Cortez & Susanto (2012), Ashraf & Rasool (2013) and Pratheepan & Yatiwella (2016)'s findings. However, Ross (1977), Frank & Goyal (2003), Baum et al (2007) and Wellalage & Locke (2015) found that there was a positive and significant effect between the two variables.…”

Section: Published By Sciedu Pressmentioning

confidence: 67%

The Effects of Managerial Ownership, Institutional Ownership, and Profitability on Capital Structure: Firm Size as the Moderating Variable

Khafid

Prihatni

Safitri

2020

IJFR

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This study was to analyze the effects of managerial ownership, institutional ownership, and profitability on capital strucuture with firm size as the moderating variable. All manufacturing companies of basic industry and chemical sector listed on Indonesia Stock Exchange during the period of 2014-2017 were the population of the study. There were 66 taken as the samples by using purposive sampling technique. There were 39 companies as research samples and 115 as unit of analysis. Data were collected by documentation method. Then, data were analyzed by using descriptive statistics and inferential statistics. The results of the study indicated that managerial ownership and institutional ownership did not significantly affect capital structure, but profitability had a negative and significant effect on capital structure. Firm size did not have any moderating effect between managerial ownership and profitability on capital strucuture, but firm size moderated the effect between institutional ownership and capital structure. It was concluded that only profitability significantly influenced capital structure, and firm size was able to moderate the effect between institutional ownership and capital structure.

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“…Peneliti (Putra, 2012), (Arini, 2013), (Khairy, 2016), (Pratheepan, 2016), (Sahabuddin, 2017), (Astuti, 2018) Berdasarkan hasil pengujian diatas dengan menggunakan program spss 22, maka didapat persamaan regresi sebagai berikut : Y = a + β 1 X 1 -β 2 X 2 + β 3 X 3 + β 4 X 4 + β 5 X 5 + e Y= 0,529 + 0,765 -0,142 + 0,572 + 0,258 + 0,877 (0,393 > 0,05) maka ditarik kesimpulan bahwa kebijakan dividen tidak berpengaruh terhadap strukur modal. Hal ini karena perusahaan telah mencapai terhadap dewasa (mature), sehingga aliran kas perusahaan relatif lebih stabil dan cenderung menggunakan dana internalnya terlebih dahulu untuk membiayai investasinya sebelum menggunakan pembiayaan eksternal melalui hutang.…”

Section: Pengaruh Company Growth Terhadap Struktur Modalunclassified

Faktor-Faktor Yang Mempengaruhi Struktur Modal

Wati

Wijayanti²,

Siddi³

2020

agj

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Capital structure is the ratio between debt (foreign capital) and own capital (equity). There are several factors that affect capital structure such as dividend policy, liquidity, tangibility, asset turnover and company growth. This study aims to determine the effect of dividend policy, liquidity, tangibility, asset turnover and company growth on capital structure. In this study, the sampling method was carried out using purposive sampling and obtained as many as 14 companies in the consumer goods industry sector which were listed on the Indonesia Stock Exchange during 2015-2018. Thus the amount of data observed in this study amounted to 56 data. Data in this study were analyzed using Statistical Package for Social Sciences (SPSS) 22 with multiple linear regression analysis methods. The results of this study indicate that liquidity and asset turnover affect the capital structure while the dividend policy, tangibility and company growth do not affect the capital structure.

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The Determinants of Capital Structure: Evidence from Selected Listed Companies in Sri Lanka

Cited by 26 publications

References 34 publications

Determinants of working capital requirement in listed firms: Empirical evidence using a dynamic system GMM

Determinants of working capital requirement in listed firms: Empirical evidence using a dynamic system GMM

The Effects of Managerial Ownership, Institutional Ownership, and Profitability on Capital Structure: Firm Size as the Moderating Variable

Faktor-Faktor Yang Mempengaruhi Struktur Modal

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