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

Micro-enterprises (MEs) have been shown to collectively be the largest employer in most developing countries thus playing a significant role in the countries economies. Using informal sector micro-enterprise furniture makers (wood and metal) in Nairobi, Kenya and based on Porter's competitive business strategies typology, this study sought to determine if the strategies employed by the informal sector MEs fit within the typology framework, and if membership within the strategic groups in the typology are a predictor of better business business performance. From the study, although membership within the two focus strategic groups of differentiation and low cost was confirmed, unlike studies done with medium and large enterprises, membership was not found to be a predictor of better business performance. Porter's typology may therefore not adequately capture the competitive business activities relevant to and directly by MEs, presenting an opportunity for research into the development of competitive business strategy typologies directly derived from their activities and therefore applicable to them.

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Analyzing the Determinants of Entrepreneurial Activity Level in Urban Micro Enterprises in Sri Lanka

SSRN Electronic Journal ◽

10.2139/ssrn.2910236 ◽

2016 ◽

Author(s):

B.W.R. Damayanthi

Keyword(s):

Sri Lanka ◽

Activity Level ◽

Entrepreneurial Activity ◽

Micro Enterprises

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The Effect of Enterprise Risk Management (ERM) on Firm Performance: Evidence from the Diversified Industry of Sri Lanka

Journal of Management Research ◽

10.5296/jmr.v10i1.12429 ◽

2018 ◽

Vol 10 (1) ◽

pp. 75

Author(s):

Kingsley Karunaratne Alawattegama

Keyword(s):

Firm Performance ◽

Sri Lanka ◽

Empirical Evidence ◽

Negative Impact ◽

Positive Impact ◽

Enterprise Risk Management ◽

Performance Information ◽

Return On Equity ◽

Enterprise Risk ◽

And Control

The objective of this empirical study is to explore the effect of the adoption of ERM on the performance of the diversified industry of Sri Lanka. The extent of the adoption of ERM is assessed based on eight ERM functions recognized by the ERM integrated framework of the committee of sponsoring organization of the Treadway Commission and use return on equity as a proxy to measure firm performance. This study finds ERM supportive internal environment, risk-aligned objective setting, event identifications, and risk response have a positive impact on firm performance. However, none of those impacts were statistically significant. Surprisingly, empirical evidence reveals that risk assessment and control activities have a negative impact on the firm performance. Information & communication and monitoring functions indicate a significant impact on firm performance. Nevertheless, monitoring function shows a negative impact on the firm performance. The researcher believes this negative impact is attributable to the increased cost of monitoring activities that is crucial for a diversified business setup. This empirical evidence induces the researcher to conclude that, except for communication and monitoring, the adoption of ERM has no significant impact on the firm performance. These findings are contradictory with the findings of prior researchers.

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Founder's political connections, second generation involvement, and family firm performance: Evidence from China

Journal of Corporate Finance ◽

10.1016/j.jcorpfin.2015.01.004 ◽

2015 ◽

Vol 33 ◽

pp. 243-259 ◽

Cited By ~ 58

Author(s):

Nianhang Xu ◽

Qingbo Yuan ◽

Xuanyu Jiang ◽

Kam C. Chan

Keyword(s):

Firm Performance ◽

Second Generation ◽

Family Firm ◽

Political Connections

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Political connections and firm value: an analysis of listed firms in Sri Lanka

Pacific Accounting Review ◽

10.1108/par-06-2014-0020 ◽

2016 ◽

Vol 28 (1) ◽

pp. 92-106 ◽

Cited By ~ 4

Author(s):

Henk Berkman ◽

Vidura Galpoththage

Keyword(s):

Sri Lanka ◽

Firm Value ◽

Public Perception ◽

Convincing Evidence ◽

Political Connections ◽

Political Connection ◽

Content Type ◽

Political Events ◽

The Government ◽

The Impact

Purpose – The purpose of this study is to use a portfolio-time-series approach to examine the impact of five important political events on the value of politically connected firms in Sri Lanka. Design/methodology/approach – This study examines five major political events to test if political connections affect market value of listed companies in Sri Lanka. Results show that despite numerous news articles and public perception suggesting otherwise, there is no convincing evidence which indicate that political connections increase firm value in Sri Lanka. Findings – The empirical results provide no evidence that political connections increase firm value in Sri Lanka. Further tests indicate that the government is not biased towards politically connected firms when granting major projects. The authors also fail to find a relation between Tobin’s Q and the level of political connection after including several common control variables. Originality/value – This study contributes to the literature on the value of political connections by using a robust event study methodology and a novel setting: Sri Lanka in the period around the end of the civil war.

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EVALUATING THE GENDER VARIATIONS IN INFORMAL SECTOR ENTREPRENEURSHIP: SOME LESSONS FROM BRAZIL

Journal of Developmental Entrepreneurship ◽

10.1142/s1084946713500040 ◽

2013 ◽

Vol 18 (01) ◽

pp. 1350004 ◽

Cited By ~ 28

Author(s):

COLIN C WILLIAMS ◽

YOUSSEF YOUSSEF

Keyword(s):

Labor Market ◽

Informal Sector ◽

Informal Economy ◽

Developing Nations ◽

Gender Disparities ◽

Survival Strategy ◽

Marginalized Populations ◽

Men And Women ◽

Gender Variations ◽

Micro Enterprises

The aim of this paper is to evaluate critically the gender variations in informal sector entrepreneurship. Until now, a widely-held belief has been that entrepreneurs operating in the informal sector in developing nations are lowly paid, poorly educated, marginalized populations doing so out of necessity as a survival strategy in the absence of alternatives. Reporting an extensive 2003 survey conducted in urban Brazil of informal sector entrepreneurs operating micro-enterprises with five or less employees, the finding is that although less than half of these entrepreneurs are driven out of necessity into entrepreneurial endeavor in the informal economy, women are more commonly necessity-driven entrepreneurs and receive lower incomes from their entrepreneurial endeavor than men despite being better educated. The outcome is a call to recognize how the gender disparities in the wider labor market are mirrored and reinforced by the participation of men and women in the realm of informal sector entrepreneurship.

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Political Connections and Firm Performance: The Case of Hong Kong

Journal of East Asian Studies ◽

10.1017/s1598240800003465 ◽

2010 ◽

Vol 10 (2) ◽

pp. 275-314 ◽

Cited By ~ 17

Author(s):

Stan Hok-Wui Wong

Keyword(s):

Hong Kong ◽

Firm Performance ◽

Political Institutions ◽

Dominant Role ◽

Chief Executive ◽

Political Connections ◽

Firm Level ◽

Systematic Analysis ◽

Return On Equity ◽

Systematic Assessment

Business interests are overrepresented in Hong Kong's nominally democratic political institutions. Many in Hong Kong perceive this as evidence of the existence of “collusion between government and business,” a phenomenon that has stirred public concerns in the city since its sovereignty transfer. Although anecdotal accounts abound, no systematic analysis has been conducted to evaluate the validity of this perception. In this article I use a rich firm-level dataset to offer the first systematic assessment of the effects of political connections on firm performance in Hong Kong. I define politically connected firms as firms that have stakeholders concurrently holding a seat on the Election Committee, a constitutional body that elects the city's chief executive. I found evidence, though not overwhelming, consistent with the “collusion” hypothesis: political connections do improve firm performance measured by return on equity and market-to-book ratio. The improvement is unlikely due to unobserved confounding factors such as firms' inherent ability. As for the origin of the political connections, the data show that a firm's economic power has little predictive value of its connections to the Election Committee. Rather, number of employees matters; firms that hire fewer workers were more likely to gain a seat on the 1997 Election Committee. This result may suggest that Beijing plays a more dominant role in the formation of political connections—that serve Beijing's co-optation needs rather than the interests of powerful firms that may have a desire to “capture” the state.

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