Abstract:
Corporate governance is crucial for gaining investor confidence and unlocking shareholder value. The aim of the study is
to examine the influence of internal corporate governance mechanisms on enterprise value of listed companies in Sri
Lanka. This study is confined to listed companies using a sample of 104 companies in Sri Lanka with 728 firm-year
observations during the period of 7 years from 2015 to 2021. The statistical techniques of Pearson’s correlation and
Generalized Methods of Moments (GMM) were used to analyze the association between internal corporate governance
mechanisms and enterprise value. The findings of this study revealed that board size positively influences the enterprise
value of listed companies in Sri Lanka whereas Chief Executive Officer Duality (CEOD) and managerial ownership have
a negative influence on enterprise value. Board independence, board diversity, board activity and audit committee size
have not shown any significant influence on enterprise value. Moreover, control variables, firm size, firm age and leverage
have positive effects on enterprise value. These findings have implications for managers, policymakers, researchers and
investors in general and those in developing countries in particular. This paper offers contributions to both literature and
practice on what internal corporate governance dimensions are important to enhance the enterprise value of listed
companies.
