The Role of Social Networks in the Entrepreneurial Performance of Small and Medium Scale Entrepreneurs in the Ratnapura District

Abstract

The central issue addressed in this study is whether social networks of the entrepreneurs were a determinant of entrepreneurial performance The study is based on Granovetters argument that economic action, including entrepreneurship is embedded in networks of social relationships. The study was conducted in the Ratnapura district in Sri Lanka, with a sample of forty entrepreneurs drawn from the membership list of the Sabaragamuwa Chamber of Commerce and Industry In an attempt to identify whether. there was a relationship between networking and entrepreneurial performance, a survey questionnaire was developed, and data were collected on network size, activity vel,diversity.multiplexity.reciprocity and entrepreneurial performance. A positive relationship between entrepreneurial performance and five identified network dimensions was hypothised.The results of the study reveal that diverse and dense networking has a positive effect on performance. The time spent on developing and maintaining network contacts. network multiplexity and reciprocity were positively related to performance. Thus, the hypotheses formuiated in this study were supported by the results The empirical results also supports the social embeddedness model of business relations, friends and family were at the centen of entrepreneurs network, and the networks are of long duration.