Abstract:
This paper examines the relation between corporate governance practicesand liquidity
management. Hence good corporate governance practicesoptimize the liquidity management and
long term value of the firm for shareholders. There is a great awareness among the researchers to
carry out the researches in “liquidity management'. Very little researches on “liquidity management”
are available in Sri Lanka and need to be empowered companies to pay a special attention on
corporate governance. The main objective of this study is to examine the relationship between
corporate governance practicesand liquidity managementin listed manufacturing firms in Sri Lanka.
Design:In a way, the present study is initiated on “corporate governance practicesand liquidity
management“with the samples of 20 manufacturing companies using the data representing the
periods of 2008 2012. The statistical tests were used includes: descriptive statistics, correlation and
regression analyses.
Findings: The study found that determinants of corporate governance are not correlated to the
liquidity managementmeasures of the organization. Regression model showed that corporate
governance don't affect companies' CR, and QR. Further recommendations are also put forwarded in
the research.
Research Limitations: The study only used data from the 2008-2012 annual reports. However, the
findings have highlighted the effects of the liquidity managementand corporate governance.
Originality/Value: The study contributes to literature in Sri Lanka. Furthermore, the finding of the
paper can be considered as helpful for managers and users that are anxious to develop financial
description quality and practices of capital structure.
