Do entrepreneurial business and political connections lead to greater firm performance? Exploring informal-sector micro-enterprises in Sri Lanka

Nilupama Wijewardena, Ramanie Samaratunge, Ajantha Sisira Kumara, Kumudinei Dissanayake

Research output: Chapter in Book/Report/Conference proceedingChapter (Book)Researchpeer-review


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.
Original languageEnglish
Title of host publicationNew Horizons in Management, Leadership and Sustainability
Subtitle of host publicationInnovative Case Studies and Solutions for Emerging Economies
EditorsSatinder Dhiman, Ramanie Samaratunge
Place of PublicationCham Switzerland
Number of pages24
ISBN (Electronic)9783030621711
ISBN (Print)9783030621704, 9783030621735
Publication statusPublished - 2021

Publication series

NameFuture of Business and Finance
ISSN (Print)2662-2467
ISSN (Electronic)2662-2475


  • Business connections
  • Entrepreneurship
  • Informal sector
  • Political connections
  • Self-efficacy

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