Small Enterprises (SEs) do not have capacity to collect and evaluate information to predict future behavior of business environment on one hand and they fail to avoid the hazards from opportunism of exchange partners on the other hand due to the lack of information. SEs develop informal and personal relationships with different members of the network expecting supports in order to overcome their limitation of information. The network relationships lead to build Social Capital (SC) (values of social relationships; i.e. inter-personal trusts, relational norms, flexibility, integrity, common understand etc.) and thereby facilitate access to information which have an influence on mitigating Transaction Uncertainty (TU). Therefore, the study attempted to explore how different dimensions of SC affect the mitigation of TU of SEs in Sri Lanka. The study mainly employed the survey method to gather data using quantitative methodological approach. The data were collected from 373 SEs located in nine districts representing all Provinces in Sri Lanka, conducting face-to-face interviews with the respondents. The data were analysed using Partial Least Squares-Structural Equation Modelling. The results revealed that different dimensions of SC (structural, relational and cognitive) have a significant impact on mitigating TU of SEs in Sri Lanka. Thus, the study has provided sufficient evidences to conclude that SC has a significant impact on mitigating TU of SEs. The study contributes to theoretical knowledge by synthesizing all the dimensions of SC and TU into a new framework and testing it empirically which extends the transaction cost economics in the context of SEs in Sri Lanka. The study contributes to the methodology quantifying SC of SEs using a multi-dimensional conceptual model. The study provides important insights for policy makers to focus their strategies to new direction rather than conventional supporting approaches to develop SEs.
| Published in | Journal of Business and Economic Development (Volume 3, Issue 1) |
| DOI | 10.11648/j.jbed.20180301.11 |
| Page(s) | 1-10 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2017. Published by Science Publishing Group |
Small Enterprises, Social Capital, Transaction Uncertainty
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APA Style
H. M. S. Priyanath, S. P. Premaratne. (2017). Effect of Social Capital on Mitigating Transaction Uncertainty of Small Enterprises in Sri Lanka. Journal of Business and Economic Development, 3(1), 1-10. https://doi.org/10.11648/j.jbed.20180301.11
ACS Style
H. M. S. Priyanath; S. P. Premaratne. Effect of Social Capital on Mitigating Transaction Uncertainty of Small Enterprises in Sri Lanka. J. Bus. Econ. Dev. 2017, 3(1), 1-10. doi: 10.11648/j.jbed.20180301.11
AMA Style
H. M. S. Priyanath, S. P. Premaratne. Effect of Social Capital on Mitigating Transaction Uncertainty of Small Enterprises in Sri Lanka. J Bus Econ Dev. 2017;3(1):1-10. doi: 10.11648/j.jbed.20180301.11
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Download@article{10.11648/j.jbed.20180301.11,
author = {H. M. S. Priyanath and S. P. Premaratne},
title = {Effect of Social Capital on Mitigating Transaction Uncertainty of Small Enterprises in Sri Lanka},
journal = {Journal of Business and Economic Development},
volume = {3},
number = {1},
pages = {1-10},
doi = {10.11648/j.jbed.20180301.11},
url = {https://doi.org/10.11648/j.jbed.20180301.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20180301.11},
abstract = {Small Enterprises (SEs) do not have capacity to collect and evaluate information to predict future behavior of business environment on one hand and they fail to avoid the hazards from opportunism of exchange partners on the other hand due to the lack of information. SEs develop informal and personal relationships with different members of the network expecting supports in order to overcome their limitation of information. The network relationships lead to build Social Capital (SC) (values of social relationships; i.e. inter-personal trusts, relational norms, flexibility, integrity, common understand etc.) and thereby facilitate access to information which have an influence on mitigating Transaction Uncertainty (TU). Therefore, the study attempted to explore how different dimensions of SC affect the mitigation of TU of SEs in Sri Lanka. The study mainly employed the survey method to gather data using quantitative methodological approach. The data were collected from 373 SEs located in nine districts representing all Provinces in Sri Lanka, conducting face-to-face interviews with the respondents. The data were analysed using Partial Least Squares-Structural Equation Modelling. The results revealed that different dimensions of SC (structural, relational and cognitive) have a significant impact on mitigating TU of SEs in Sri Lanka. Thus, the study has provided sufficient evidences to conclude that SC has a significant impact on mitigating TU of SEs. The study contributes to theoretical knowledge by synthesizing all the dimensions of SC and TU into a new framework and testing it empirically which extends the transaction cost economics in the context of SEs in Sri Lanka. The study contributes to the methodology quantifying SC of SEs using a multi-dimensional conceptual model. The study provides important insights for policy makers to focus their strategies to new direction rather than conventional supporting approaches to develop SEs.},
year = {2017}
}
TY - JOUR T1 - Effect of Social Capital on Mitigating Transaction Uncertainty of Small Enterprises in Sri Lanka AU - H. M. S. Priyanath AU - S. P. Premaratne Y1 - 2017/12/14 PY - 2017 N1 - https://doi.org/10.11648/j.jbed.20180301.11 DO - 10.11648/j.jbed.20180301.11 T2 - Journal of Business and Economic Development JF - Journal of Business and Economic Development JO - Journal of Business and Economic Development SP - 1 EP - 10 PB - Science Publishing Group SN - 2637-3874 UR - https://doi.org/10.11648/j.jbed.20180301.11 AB - Small Enterprises (SEs) do not have capacity to collect and evaluate information to predict future behavior of business environment on one hand and they fail to avoid the hazards from opportunism of exchange partners on the other hand due to the lack of information. SEs develop informal and personal relationships with different members of the network expecting supports in order to overcome their limitation of information. The network relationships lead to build Social Capital (SC) (values of social relationships; i.e. inter-personal trusts, relational norms, flexibility, integrity, common understand etc.) and thereby facilitate access to information which have an influence on mitigating Transaction Uncertainty (TU). Therefore, the study attempted to explore how different dimensions of SC affect the mitigation of TU of SEs in Sri Lanka. The study mainly employed the survey method to gather data using quantitative methodological approach. The data were collected from 373 SEs located in nine districts representing all Provinces in Sri Lanka, conducting face-to-face interviews with the respondents. The data were analysed using Partial Least Squares-Structural Equation Modelling. The results revealed that different dimensions of SC (structural, relational and cognitive) have a significant impact on mitigating TU of SEs in Sri Lanka. Thus, the study has provided sufficient evidences to conclude that SC has a significant impact on mitigating TU of SEs. The study contributes to theoretical knowledge by synthesizing all the dimensions of SC and TU into a new framework and testing it empirically which extends the transaction cost economics in the context of SEs in Sri Lanka. The study contributes to the methodology quantifying SC of SEs using a multi-dimensional conceptual model. The study provides important insights for policy makers to focus their strategies to new direction rather than conventional supporting approaches to develop SEs. VL - 3 IS - 1 ER -
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