Impact of Entrepreneurs’ Perceptions of Public Policies on Business Performance of Indigenous Handicraft Industries in Sri Lanka: An Empirical Study

Abstract

Recent scholars have not adequately studied how the entrepreneurs’ perceptions of Public Policies (PPs) of Sri Lanka impact on the Business Performance (BP) of indigenous handicraft industries after the economic downturn. This study attempts to assess the impact of entrepreneurs’ perceptions of PPs on the BP of indigenous handicraft industries in Sri Lanka employing a quantitative method. A structured questionnaire was administered, and data were gathered from 315 different indigenous handicraft industries selected purposively from seven indigenous craft villages as clusters. Data were analyzed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The results revealed that entrepreneurs’ perceptions of regulatory policies, tax policies, trade policies, and environmental policies have a negative impact on the BP while entrepreneurs’ perceptions of financial policies and human resources policies have a positive impact on the BP of indigenous handicraft industries. Thus, the empirical evidence of the study confirmed that the entrepreneurs’ perceptions of PPs have discouraged the BP while entrepreneurs’ perceptions of financial, and human resource policies were highly influenced the improvement of BP of indigenous handicraft industries.