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Performance analysis of institutional shareholdings: an empirical study of top 50 non-financial listed firms in Sri Lanka

Author

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  • Nadarajah Sivathaasan
  • Kosgolla Anura Udayakumara

Abstract

In this paper, we examine the impact of institutional shareholdings on the financial performance of the top 50 non-financial firms in Sri Lanka by analysing 215 firm-year observations over the five-year period from 2009 to 2013. We find evidence of a relatively higher proportion of institutional ownership on total shareholdings, leading to a negative impact on both measure of accounting (ROA) and market performance (Tobin's Q), which strongly fit into goodness of the given model at 1% level of significance. Also, we report the adjusted R2 of accounting performance significantly higher than that of market performance. Further, we document a positive and significant impact of leverage and liquidity on accounting and market performance respectively, whereas firm size shows a negative and significant influence on both performance measures. The findings of this study will assist policy makers, financial managers and investors in making investment decisions.

Suggested Citation

  • Nadarajah Sivathaasan & Kosgolla Anura Udayakumara, 2015. "Performance analysis of institutional shareholdings: an empirical study of top 50 non-financial listed firms in Sri Lanka," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 5(4), pages 295-310.
    • Handle: RePEc:ids:afasfa:v:5:y:2015:i:4:p:295-310
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