Editorial Note

This study empirically explores the relationship between firm characteristics and capital structure in Sri Lankan companies. Six years of data for 158 firms listed on the Colombo Stock Exchange are analyzed using a conditional quantile regression. The findings indicate that the capital structure of Sri Lankan firms differ between firms in different quantiles of leverage. These differences are significant with the sign of explanatory variables change with the level of leverage. The results indicate that individual firm’s finance policy needs to be responsive to the firm characteristics and should match with the different borrowing requirements of listed firms.