Abstract:
Main purpose of this study is to investigate whether there is any impact of market
power on leverage of listed manufacturing companies in Sri Lanka. Because
manufacturing sector has grown faster and number of companies also more than any
other sector in Sri Lankan economy. The population of the study is forty companies
and thirty five companies are selected, based on the data availability for the study.
Annual reports of the listed manufacturing companies from 2013 to 2017 were used
as the secondary data source to collect data. Profitability, Growth and tangibility are
used as independent variables and leverage is the dependent variable. Data analysis
conducted by using Eviews statistical package and several statistical measures such
as descriptive analysis, correlation analysis and panel data regression analysis. The
study has proved that there is a significant and positive relation between market
power and leverage. Profitability & tangibility remained significantly negative with
leverage whereas growth remained significantly positive with leverage. The study
generates valuable insight in the area of market power and leverage as little is known
in Sri Lankan context.
