| dc.description.abstract | The impact of corporate governance on firm
performance has become a topic of conversation. However
there is less attention on how it impacts the share price. The
purpose of the study is to determine the impact of corporate
governance on the share price of companies listed in the
Colombo Stock Exchange (CSE). The research designs,
descriptive analysis, regression analysis and correlation
analysis, were used in this study and it the period of
financial year of 2015-16. A sample of 64 companies
was chosen as representative of the population out of
296 companies listed on the Colombo Stock Exchange
(CSE), excluding banking and finance sector and data
was collected using secondary method. Compliance level
of corporate governance have been measured by utilizing
self-constructed Corporate Governance Index (CG Index)
with five sub-indexes namely Board Structure (BS), CEO
and Management(CEO), Transparency and Disclosure
(TR), Investor Relation(IV) and CSR Disclosure(CSR). The
index contains 40 criteria under the above Sub-Indexes.
The study found that there is no significant relationship
between overall CG index and the share price. However,
transparency demonstrated a significant negative impact
on the share price. When the overall sample was clustered
in to sub samples as high, medium and low according to
firm size, the medium sample demonstrated a significant
positive relationship between CG index and the share
price. The important key finding that was supported with
enough evidence to show lowering the firm size the Board
Structure (BS) and Investor Relation (IV) is significant to
increase the share price. Unexpectedly Transparency (TR)
demonstrated a significant negative impact for smaller
firms. Further, it was found that the corporate governance
practices generated a long term impact on share price since
the same impact can be found in lead share price also. | en_US |
