ICT Usage, Bounded Rationality and Business Performance of SMEs in Sri Lanka

R. V. S. P. K. Ranatunga
H. M. S. Priyanath
R. G. N. Megama

Abstract

This study endeavours to investigate empirically how Information and Communications Technology (ICT) usage affects the bounded rationality and business performance of Small and Medium Enterprises (SMEs) in Sri Lanka. The data collection has been done with 400 owners of SMEs in Sri Lanka by employing telephone and face to face interviews using a structured questionnaire. The Partial Least Squares-Structural Equation Modelling (PLS-SEM) was utilized to analyse the data. The empirical results discovered that the different dimensions of ICT usage such as infrastructure, applications, policy, human resources, and mobile technology have a negative impact on bounded rationality and positive effects on the business performance of SMEs in Sri Lanka. Thus, the study recognizes that several dimensions of ICT usage make proper information flow to pull out information asymmetry and reduce the bounded rationality of SMEs, thereby increasing the business performance of SMEs in Sri Lanka.

Keywords:  Bounded Rationality, Business Performance, ICT Usage, Small and Medium Scale Enterprises

Volume 12, Issue 1
June 30, 2021
Pages: 54-86

DOI: http://doi.org/10.4038/cbj.v12i1.71

Suggested citation:

Ranatunga, R.V.S.P.K., Priyanath, H.M.S. & Megama, R.G.N. (2021). ICT usage, bounded rationality and business performance of SMEs in Sri Lanka. Colombo Business Journal, 12(1), 54-86. http://doi.org/10.4038/cbj.v12i1.71

R. V. S. P. K. Ranatunga
Center for Computer Studies, Sabaragamuwa University of Sri Lanka, Sri Lanka
spkr@ccs.sab.ac.lk

H. M. S. Priyanath
Department of Economics and Statistics, Sabaragamuwa University of Sri Lanka, Sri Lanka

R. G. N. Megama
Department of Computer Science, University of Sri Jayewardenepura, Sri Lanka