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Do Entrepreneurial Business and Political Connections Lead to Greater Firm Performance? Exploring Informal-Sector Micro-enterprises in Sri Lanka

In: New Horizons in Management, Leadership and Sustainability

Author

Listed:
  • Nilupama Wijewardena

    (RMIT University, Department of Management, International Business and Entrepreneurship, School of Management, College of Business & Law)

  • Ramanie Samaratunge

    (Monash University, Department of Management, Monash Business School)

  • Ajantha Sisira Kumara

    (University of Sri Jayewardenepura, Department of Public Administration, Faculty of Management Studies and Commerce)

  • Kumudinei Dissanayake

    (University of Colombo, Department of Management & Organization Studies, Faculty of Management and Finance)

Abstract

This study examines the direct and indirect effects of informal-sector micro-entrepreneurs’ political and business connections on their self-efficacy and firm performance via the mediating role of perceived support from the institutional environment in an emerging economy, Sri Lanka. The findings using matched survey data from 635 entrepreneurs and their case officers reveal that micro-entrepreneurs’ utilization of business ties and political ties impacts firm performance through the mediated role of the perceived support from the regulatory and cognitive environments and self-efficacy. We argue that, for informal-sector micro-entrepreneurs, their business and political connections provide a crucial link to the formal institutional environment, thereby increasing their self-efficacy and performance.

Suggested Citation

Handle: RePEc:spr:fuobcp:978-3-030-62171-1_6
DOI: 10.1007/978-3-030-62171-1_6
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