Empirical Investigation into the Influence of Corporate Governance on Capital Structure Decisions: Evidence from Listed Companies on the Colombo Stock Exchange – A Big Data Analytics Approach

Abstract

Abstract

This research looks at how corporate governance affects capital structure choices from companies listed on the Colombo Stock Exchange using an innovative big data analytics approach. Governance features such as board independence, ownership concentration, and disclosure rules are investigated through a combination of quantitative financial information for the years 2013–2023 in combination with qualitative governance documentation and regulatory materials. Based on the use of econometric models, regression methods and sentiment analysis, the study finds clear statistical relationships between governance quality and leverage decisions. Those firms who gain benefits from independent directorships, institutional investors, and transparent disclosure policy have a head on their shoulders debt-equity arrangement, which affords their financial health and value (p < 0.01). In contrast, the institutions that suffer from poor governance, high concentration of ownership, and non-compliance with rules and regulations are likely to have a higher debt dependence, low operational flexibility and reduced value to shareholders. The use of big data strategies with predictive modeling and analysis of unstructured data sharpens our understanding of the role of governance in shaping capital structure decisions. As indicated by the results, effective governance mechanisms have positively impacted financial management and operational effectiveness, particularly for rapidly changing regulatory environments of emerging markets. Through an emphasis on necessity of governance reforms and utilization of a big data tool, this research shows how capital structure effectiveness can be improved and investor confidence fostered. This study contributes to the knowledge of governance in that it indicates how big data analyses link measurable and narrative evaluations of governance.

     Keywords: Capital Structure, Debt-Equity Ratio, Big Data Analytics, financial risk, regulatory Compliance