Interpersonal Trust and Firm Performance: Empirical evidence from Small and Medium Rice mills in Ampara District in New Normal Perspectives

Abstract

Present worldwide pandemic is affecting in economic, educational, technological and business matters, many things that might have been relevant before the pandemic no longer seem important. The challenge that countless entrepreneurs have faced is how to sustain themselves and their businesses during these difficult times. Small and Medium Enterprises are the backbone of all economies and a key source of economic growth. The main aim of this study is to investigate the effect of interpersonal trust on firm performance by SMEs in Ampara District. The target population was 55 rice millers who categorized under SMEs were registered in the district. Interpersonal trust was measured with Integrity, Honest &openness, Competence and Reliable. Firm performance was measured in terms of Profit, Market performance, Internal processes, Learning and growthand Degree of innovation. Data were gathered using structured questionnaires. In order to test the hypothesis, descriptive, correlational and regression analysis tools were applied. From the study, it is revealed that all four dimensions are statistically significant with firm performance. These key finding provide valuable implications for owners of the SMEs, government, and future entrepreneurs in this sector.