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Article
Publication date: 12 March 2021

Quanda Zhang, Rashmi Arora and Sisira Colombage

Bank branching plays a significant role in a wide range of economic activities. Existing studies on determinants of bank branching activities largely focus on developed…

Abstract

Purpose

Bank branching plays a significant role in a wide range of economic activities. Existing studies on determinants of bank branching activities largely focus on developed countries; studies devoted to developing countries are scant. The purpose of this paper is to examine the determinants of bank branching activities in one of the largest developing country India.

Design/methodology/approach

The authors employ a unique longitudinal data to study the determinants of bank branch location in India. These data are collected at the state level covering 25 Indian states for the period 2006–2017. The authors employ Poisson regression that are better suited for modeling counted dependent variable.

Findings

First, region and bank specific factors such as size of population and bank deposits influence location of bank branches. Second, the relationship between these factors and branch locations is heterogeneous across different types of banks and across states with different business environments.

Practical implications

First, from the view of banks, considering the factors of branch location are crucial in order to set out branching strategy. Irrespective of policy measures aimed at promoting financial inclusion in India, the authors show that banks consider economic activities in the region in locating their branches. Second, from the view of policy makers and regulators, such branching strategy could potentially contribute to financial exclusion. As a result, population in the less developed regions may be excluded from accessing financial services. Hence, policy makers and regulators should take into this account when formulating policies aimed at promoting financial inclusion.

Originality/value

First, while existing studies largely focus on developed countries, studies devoted to developing countries are scant. To the best of our knowledge, the authors have not come across any study that investigates the determinants of bank branch location in India, so the authors reasonably believe that this study is a first-of-its-kind. Second, the study provides a new perspective concerning how regional and bank specific factors influence banks of different ownership in locating branches. Third, while traditional regression used to be a method of choice among early studies, the authors employ Poisson regression that is better suited for modeling counted dependent variable.

Details

International Journal of Bank Marketing, vol. 39 no. 5
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 13 March 2017

H. Kent Baker, Satish Kumar, Sisira Colombage and Harsh Partap Singh

The purpose of this paper is to investigate the working capital management (WCM) practices adopted by Indian firms listed on the National Stock Exchange (NSE).

Abstract

Purpose

The purpose of this paper is to investigate the working capital management (WCM) practices adopted by Indian firms listed on the National Stock Exchange (NSE).

Design/methodology/approach

Using a questionnaire, the authors gather data from 110 financial managers and use various statistical techniques to test for statistical significance.

Findings

The evidence shows that the majority (54.5 percent) of sample firms follow a moderate approach in financing their activities, which involves a trade-off between liquidity and profitability. Respondents tend to use an informal approach for WCM and consider receivables management as the most important component of WCM. In terms of WCM monitoring and financial measures, respondents mainly consider the cash conversion cycle and net working capital. Indian firms tend to use centralized cash management and rely heavily on material requirement planning (MRP) and enterprise resource planning (ERP) for proper inventory management.

Research limitations/implications

Tests involving firm size, foreign sales, and average age do not differ significantly between the NSE-listed firms and the sample firms. This evidence lessens concerns of non-response bias and the ability to generalize the findings to Indian firms.

Originality/value

By updating and extending previous research on WCM, this study fills a gap in the literature by providing insights into practices adopted by Indian firms in managing WCM and its components.

Details

Managerial Finance, vol. 43 no. 3
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 6 February 2017

Harsh Pratap Singh, Satish Kumar and Sisira Colombage

The purpose of this study is to quantitatively aggregate the findings of prior literature on the effect of working capital management (WCM) on corporate profitability…

Abstract

Purpose

The purpose of this study is to quantitatively aggregate the findings of prior literature on the effect of working capital management (WCM) on corporate profitability using the meta-analysis technique developed by Hunter et al. (1982).

Design/methodology/approach

A set of 46 research articles that directly studied the relationship between WCM, and profitability was analyzed for the purpose. In addition to overall meta-analysis, a detailed subgroup study was also conducted to test whether the differences in results are due to moderating effects related to different profitability proxies, economic development of a specific country and size of the firms under study.

Findings

The findings of this meta-analysis confirm that WCM is negatively associated with profitability, which means an aggressive WCM policy leads to higher profitability. Overall, and in all the subgroup studies, the cash conversion cycle was found to be negatively associated with profitability.

Originality/value

Unlike narrative literature review papers, this meta-analysis provides quantitatively aggregate evidence on the relationship of WCM and firms’ profitability. To the best of authors’ knowledge, no previous meta-analysis paper is published on the topic.

Details

Qualitative Research in Financial Markets, vol. 9 no. 1
Type: Research Article
ISSN: 1755-4179

Keywords

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Article
Publication date: 3 April 2017

Satish Kumar, Sisira Colombage and Purnima Rao

The purpose of this paper is to study the status of studies on capital structure determinants in the past 40 years. This paper highlights the major gaps in the literature…

Abstract

Purpose

The purpose of this paper is to study the status of studies on capital structure determinants in the past 40 years. This paper highlights the major gaps in the literature on determinants of capital structure and also aims to raise specific questions for future research.

Design/methodology/approach

The prominence of research is assessed by studying the year of publication and region, level of economic development, firm size, data collection methods, data analysis techniques and theoretical models of capital structure from the selected papers. The review is based on 167 papers published from 1972 to 2013 in various peer-reviewed journals. The relationship of determinants of capital structure is analyzed with the help of meta-analysis.

Findings

Major findings show an increase of interest in research on determinants of capital structure of the firms located in emerging markets. However, it is observed that these regions are still under-examined which provides more scope for research both empirical and survey-based studies. Majority of research studies are conducted on large-sized firms by using secondary data and regression-based models for the analysis, whereas studies on small-sized firms are very meager. As majority of the research papers are written only at the organizational level, the impact of leverage on various industries is yet to be examined. The review highlights the major determinants of capital structure and their relationship with leverage. It also reveals the dominance of pecking order theory in explaining capital structure of firms theoretically as well as statistically.

Originality/value

The paper covers a considerable period of time (1972-2013). Among very few review papers on capital structure research, to the best of authors’ knowledge; this is the first review to identify what is missing in the literature on the determinants of capital structure while offering recommendations for future studies. It also synthesize the findings of empirical studies on determinants of capital structure statistically.

Details

International Journal of Managerial Finance, vol. 13 no. 2
Type: Research Article
ISSN: 1743-9132

Keywords

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Article
Publication date: 25 June 2021

Kirti Goyal, Satish Kumar, Purnima Rao, Sisira Colombage and Ankit Sharma

This study aims to explore the impact of the containment measures during COVID-19 on individuals’ finances, financial resilience during such distress and identifying the…

Abstract

Purpose

This study aims to explore the impact of the containment measures during COVID-19 on individuals’ finances, financial resilience during such distress and identifying the most financially vulnerable among them. Tracing such impact during the pandemic has been challenging due to a lack of representative data. This paper addresses this gap in the present study.

Design/methodology/approach

A survey has been conducted using a structured questionnaire containing various items that portray the impact on income, spending, saving, investment, borrowing, insurance and retirement. The sample consists of 699 respondents and purposive and snowball sampling has been used for data collection. The results are presented and analyzed using infographics and frequency distributions. This study conducts an analysis of variance and Chi-square tests for significance.

Findings

This paper finds a fall in income and limited ability to cope with the current economic conditions. The survey highlights inadequate savings and insurance, weak retirement planning, outstanding loans and under-diversified investments inhibiting financial resilience even among the higher-income group. Particularly, lower-income strata, women and not much educated are most financially vulnerable. Further, no substantial financial benefits have been received from the government and people rely on their usual income sources.

Originality/value

To the best of the authors’ knowledge, this is the first study that measures the pandemic’s impact on personal finances, especially in connection with a developing economy like India. Policy interventions are critical to the millions for whom financial literacy is required now more than ever.

Details

Qualitative Research in Financial Markets, vol. 13 no. 4
Type: Research Article
ISSN: 1755-4179

Keywords

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Article
Publication date: 19 March 2019

Faisal Shahzad, Ijaz Ur Rehman, Sisira Colombage and Faisal Nawaz

The purpose of this paper is to empirically investigate the impact of two monitoring mechanisms: family ownership (FO) and financial reporting quality (FRQ) on investment…

Abstract

Purpose

The purpose of this paper is to empirically investigate the impact of two monitoring mechanisms: family ownership (FO) and financial reporting quality (FRQ) on investment efficiency (IE) over the period of 2007–2014 for listed firms on the Pakistan Stock Exchange.

Design/methodology/approach

The authors employ two-dimensional pooled OLS cluster at the firm and year level, two-stage least square regression and feasible generalized lease square regression regression methods.

Findings

The findings suggest that higher FRQ and FO are associated with higher IE. Further, the authors report that higher FRQ and FO mitigate over- and under-investment. The impact of FRQ on IE is stronger (weaker) for family-controlled businesses. The results for these particular estimates are robust for alternative estimation techniques and measures of FRQ and FO.

Originality/value

The study draws on both agency and behavioral agency theories and therefore contributes to the literature in the following ways. First, the authors examine a relationship between FRQ and IE. Second, the authors test the impact of FO on IE. Third, the authors test the moderating impact of FO on the relationship between FRQ and the IE of family and non-family firms in relatively less regulated emerging market.

Details

Managerial Finance, vol. 45 no. 4
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 13 March 2007

Sisira R.N. Colombage

The main aim of this paper is to report on a comprehensive survey of corporate financing decision‐making process in Sri Lankan listed companies and to compare these…

Abstract

Purpose

The main aim of this paper is to report on a comprehensive survey of corporate financing decision‐making process in Sri Lankan listed companies and to compare these results with those of similar studies conducted in developed markets.

Design/methodology/approach

The study was based on a survey questionnaire distributed among the chief executive officers (CEOs) of companies listed on the Colombo Stock Exchange, with the content of the questionnaire being based upon a review of theoretical and empirical literature in the field of finance.

Findings

The results demonstrate an adherence to a financial hierarchy, which appears to be the dominant financial policy among listed Sri Lankan companies. Corporate financing decisions seem to be influenced mostly by interest and tax considerations, while lesser weight is accorded to financial flexibility in determining the amount of funds to be raised externally through debt contracts. The evidence largely supports the propositions of the pecking order model, but also confirms some predictions found in static trade‐off theory.

Practical implications

Some of the most striking implications of the analysis relate to the under‐development of the local capital market, and the apparent need for an efficient financial system that spurs economic growth. An efficient capital market will in turn ensure that capital will be more easily channeled into financing investments.

Originality/value

This paper highlights how and why the determinants of capital structure decisions reported for developed capital markets may differ from those existing in transitional or emerging economies.

Details

Studies in Economics and Finance, vol. 24 no. 1
Type: Research Article
ISSN: 1086-7376

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Book part
Publication date: 21 October 2020

Asanga Jayawardhana and Sisira Colombage

Blockchain technology is an extension of distributed ledger technology and it is used in cryptocurrencies. Many studies describe blockchain technology and cryptocurrency…

Abstract

Blockchain technology is an extension of distributed ledger technology and it is used in cryptocurrencies. Many studies describe blockchain technology and cryptocurrency is an application of it in a very broad sense. Blockchain technology has several applications. Some of these applications could have direct or indirect relevance to either or both pillars of sustainability advocated by Crowther, Seifi, and Wond (2019). Extending to cryptocurrencies like bitcoin, one possible connection to sustainability may be the reduction of the use of paper for printing currency notes, which can save forests. Furthermore, the growing cryptocurrency market attracted the investors to focus on the price fluctuations but making them forget about the terrifying carbon problem associated with cryptocurrencies. However, this possibility has not been demonstrated anywhere so far. The issue examined here is how blockchain technology can be used for solving sustainability problems. We initiate a qualitative study of the blockchain technology/cryptocurrency and sustainability using the twin pillars of sustainability: (1) responsibility, (2) governance. An exploratory review linking blockchain technology/cryptocurrency and sustainability and its two pillars revealed many actual and trial applications by corporates as CSR initiatives and other novel programs by various agencies in various countries. In governance, corporates use the CSR route to address sustainability issues. However, no definition is an available linking cryptocurrency, blockchain technology, and sustainability and we developed a definition to fill the gap. This paper stresses that the sustainability perspective has not been used to develop the cryptocurrency definition, but rather technological and legal perspectives have employed.

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Article
Publication date: 13 September 2011

Nicholas Boone, Sisira Colombage and Abeyratna Gunasekarage

The purpose of this study is to examine whether the influence of block ownership on firm performance depends on the identity of the largest investor.

Abstract

Purpose

The purpose of this study is to examine whether the influence of block ownership on firm performance depends on the identity of the largest investor.

Design/methodology/approach

The authors analyse the data for New Zealand companies for the period from 2002 to 2007 and develop multiple regression models which test the influence of block ownership on firm performance subject to the identity of the investor. A two‐stage least square approach is employed to test the effect of possible reverse causality between block ownership and firm performance on the relationship found in multiple regression models.

Findings

The authors find that the concentrated ownership has a positive, albeit decreasing, association with firm performance. This relationship is conditioned on the identity of the largest investor. Those companies whose block investors were financial institutions performed better than their peers. The superior influence of financial investors on corporate performance did not disappear even when the endogeneity of this relationship was accounted for.

Originality/value

The main contribution of this paper is the finding of a differential influence of various identities of block investors on firm performance. It questions the role that some domestic block investors play in the governance of New Zealand companies and the reason why the financial system has allowed corporate entities to be the main shareholders of the majority of firms when they underperform relative to their peers.

Details

Pacific Accounting Review, vol. 23 no. 2
Type: Research Article
ISSN: 0114-0582

Keywords

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Article
Publication date: 1 January 2006

Tetsushi Kurita, Akiko Nakamura, Miki Kodama and Sisira R.N. Colombage

This study aims to assess and evaluate the disaster management system in Sri Lanka and the capacity of a local community to respond to natural disasters, and to propose a…

Abstract

Purpose

This study aims to assess and evaluate the disaster management system in Sri Lanka and the capacity of a local community to respond to natural disasters, and to propose a strategy for the dissemination of tsunami knowledge while raising public awareness of tsunami disasters.

Design/methodology/approach

The survey focused on three clusters of respondents and different methodologies were adopted to collect data from each group, as follows: residents: questionnaires followed by a structured interview; school children: questionnaires completed under the guidance of a teacher; government officials: questionnaires completed independently by respondents, and followed up with unstructured interviews with officials in charge of disaster related activities.

Findings

The results of the survey of residents indicate that; more than 90 percent of residents lacked tsunami knowledge prior to the 2004 tsunami; the main source of information during the disaster was direct information from family and neighbors; school education is important for raising awareness of disaster reduction; and an early warning system is a key requirement for reducing damage in the future. The school surveys reveal that; about 30 percent of school children do not yet understand what causes a tsunami; 90 percent of school children have a keen interest in studying natural disasters; comprehensive disaster education has not been provided; and audio‐visual means are thought to be the most effective tool for disaster education. The survey of officials shows that; seminars and drills on natural disaster have not thus far been conducted among general officials other than the military and police; measures need to be developed to safeguard the interests of tourists; and sirens, TV, and radio broadcasts are effective tools for disseminating disaster warnings to residents.

Practical implications

Based on the findings of the questionnaire and interview surveys, the following recommendations are proposed for disseminating knowledge and raising public awareness of tsunami disasters: promote disaster education at the school level; implement community‐level public awareness programs; enhance information management systems; and improve coordination mechanisms within the disaster management system.

Originality/value

At present, this is the only study being conducted whose goal is to quantitatively evaluate public awareness of natural disasters and disaster management in Sri Lanka.

Details

Disaster Prevention and Management: An International Journal, vol. 15 no. 1
Type: Research Article
ISSN: 0965-3562

Keywords

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