Effect of Network Structure on Transaction Cost of Small Enterprises in Sri Lanka: An Empirical Study

Priyanath, H. M. S.

doi:10.15640/jsbed.v5n1a3

Cited by 12 publications

(19 citation statements)

References 63 publications

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“…It refers to the situation where all parties to a transaction face incomplete levels of information [33]. SEs use their informal and personal connections in order to get required information [34]. These informal and personal connections do not have formal and written agreement but these connections are based on network relationships with family members, relatives, friends, supportive institutions and the others [34], [35].…”

Section: Literature and Hypothesesmentioning

confidence: 99%

“…Important aspects of the SSC are the pattern of ties between the members of a social network; network structure based on density of ties and frequency of connectivity and interaction [11]. Thus, scholars highlighted that network size (total number of actors that the focal firm is connected to) and the density of network (existing connections out of potential ties) are as the two reflective dimensions of SSC [34], [40]. The Relational Social Capital (RSC) refers as resources that generate from the value of relationships among individuals.…”

Section: Literature and Hypothesesmentioning

confidence: 99%

“…The Relational Social Capital (RSC) refers as resources that generate from the value of relationships among individuals. The value of relationship is reflected by the strength of relationships and qualities of the relationships [34], [40]. The RSC has two broad dimensions: a) strength of relationships and b) qualities of relationships which are reflected by interpersonal trust (the willingness to be vulnerable to another person), norms (generalized expectations of behavior, such as norms of reciprocity, flexibility, solidarity, reciprocity and role of integrity) [32], [41], [42].…”

Section: Literature and Hypothesesmentioning

confidence: 99%

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Effect of Social Capital on Mitigating Transaction Uncertainty of Small Enterprises in Sri Lanka

Priyanath¹,

Premaratne²

2018

JBED

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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.

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Section: Literature and Hypothesesmentioning

confidence: 99%

Section: Literature and Hypothesesmentioning

confidence: 99%

Section: Literature and Hypothesesmentioning

confidence: 99%

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Effect of Social Capital on Mitigating Transaction Uncertainty of Small Enterprises in Sri Lanka

Priyanath¹,

Premaratne²

2018

JBED

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“…However, Brouthers and Nakos (2004) affix that environmental uncertainty uses to influence transaction cost, target market environment use to develop environmental uncertainty. Priyanath (2017) mentioned that market or hierarchy controls characteristics of transaction cost. Business firms attempt to control the transaction cost in reducing behavior employing these two alternative strategies.…”

Section: Literature Reviewmentioning

confidence: 99%

The Influence of Transaction Costs on the Business Performances of Tesco Supermarket

Jonah¹

2018

IJBSS

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The main purpose of this research is to analyse the influence of transaction costs on the business performance of Tesco supermarket. This research is structured into four sections which are introduction, literature review, theoretical analysis and conclusion. Literature review on transaction cost theory and the business phenomenon which is the Tesco £4.6 billion loss in 2015 was critically reviewed. A theoretical analysis was carried out identifying Tesco supermarket having high transaction cost. The Chief Executive of Tesco reduced the price of some goods and close down some outlet of Tesco which was not making profit, the business performance improves and they gain sustainable competitive advantages. The research concluded that for any business organization to perform and to gain sustainable competitive advantages, top managers must be ready to review the strategic roadmap of the business organization to fit in any political, economic, social, cultural and technological environment challenges.

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“…These informal and personal connections do not have formal and written agreements but these connections are based on network relationships with family members, relatives, friends, supportive institutions and the others (Bhagavatula, 2009;Lu, 2007;Priyanath & Premaratne, 2017a). Literature describes that the network relationship i.e.…”

Section: Introductionmentioning

confidence: 99%

Effect of Information Access through Social Capital on Mitigating Business Opportunism of Small Enterprises in Sri Lanka

Priyanath

Premaratne

2017

Colombo Bus. J

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The study explored how information access through different dimensions of Social Capital (SC) (structural, relational and cognitive) affects the mitigation of business opportunism. Data were collected from 373 Small Enterprises (SEs) in Sri Lanka, conducting face-to-face interviews with the owners of SEs. Partial Least Squares-Structural Equation Modelling (PLS-SEM) was employed to analyse data. The results revealed that information accessed through different dimensions of SC have significant negative effects with business opportunism of exchange partners. Therefore, the study recommends SEs to develop SC while having strong relationships with exchange partners in order to access information leading to the mitigation of opportunism of exchange partners.

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Effect of Network Structure on Transaction Cost of Small Enterprises in Sri Lanka: An Empirical Study

Cited by 12 publications

References 63 publications

Effect of Social Capital on Mitigating Transaction Uncertainty of Small Enterprises in Sri Lanka

Effect of Social Capital on Mitigating Transaction Uncertainty of Small Enterprises in Sri Lanka

The Influence of Transaction Costs on the Business Performances of Tesco Supermarket

Effect of Information Access through Social Capital on Mitigating Business Opportunism of Small Enterprises in Sri Lanka

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