Impact of Social Capital Empowerments on the Businesses Success among the Micro and Small-Scale Tourism Entrepreneurs in Sri Lanka

Abstract

This paper aims to reveal the impact of social capital which was empowered by Community Based Tourism projects on the business success of micro and small-scale tourism entrepreneurs (MSSTEs) in rural tourism destinations and to determine is there any distinction of the variation created in the business success by the construct of social capital between the MSSTES who were empowered and who were not empowered. Further, determining of which type of social capital either structural or cognitive does affect highly on the business success was focused. Positivism research approach applied and a sample of MSSTEs in rural tourism destinations from two provinces from Sri Lanka was selected. A pre-tested structured questionnaire was used for primary data collection. Three hypotheses were formulated and tested to reveal the impact of social capital on business success. Independent sample T-Test, correlation and multiple regression analysis were applied to test the hypotheses. Findings revealed that social capital affect significantly on creating a variance in business success. Both structural and cognitive social capital affect significantly on the business success while structural capital shows more power to create a variance on business success than cognitive social capital. This implies that tangible social capital attributes such as well-functioning of community associations, strong interpersonal and institutional networks, regular gathering, etc. are perceived as very important for business success. Also, cognitive type social capital such as shared vision, values and norms, trustworthiness, equality in sharing resources and benefits, etc. creates a significant impact on the business growth.