Abstract:
The board characteristics are generally seen as the major corporate control
mechanism in Sri Lanka. Board characteristics and capital structure are correlated but a
casual effect has not been established yet. The goal of this paper is to study this issue by
identifying a specific channel through board characteristics affect capital structure. This
study examines the relationship between board characteristics and capital structure among
selected hotels and restaurants in Sri Lanka. Which covered over a period of past 5 years
from 2008 to 2012, Correlation and regression analysis statistics were used in the analysis
and findings suggest that there is a significant relationship exists between board
characteristics and capital structure among the hotels and restaurants in Sri Lanka.
However, the findings of this paper are based on a study conducted on the selected hotels
and restaurants. Therefore, the results are valid for this sector. The results add insight on the
relation between monitoring mechanisms and capital structure of hotels in an emerging
market.
