The Impact of Service Rendering Constraints on Entrepreneurial Performance in the Northern Province of Sri Lanka: A Quantitative Approach

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a vital role in regional economic development, particularly in post-conflict areas like Sri Lanka’s Northern Province. This study explores the impact of service delivery constraints on the performance of Micro, Small, and Medium Enterprises (MSMEs) in Sri Lanka’s post conflict Northern Province. Anchored in the Resource-Based View (RBV) and Institutional Theory, the research nvestigates how limitations in financial accessibility, infrastructure and digital connectivity, capacity building and training, and institutional coordination affect entrepreneurial performance. A quantitative methodology was adopted, utilizing survey data from 110 MSME owners and managers across five districts. Employing multiple regression analysis and Structural Equation Modelling (SEM), the results indicate that all four service constraints exert a statistically significant and adverse impact on MSME performance. Among these, financial barriers were identified as the most detrimental, followed by infrastructural deficits, inadequate training, and limited market access. The findings underscore persistent structural and institutional challenges impeding business growth, innovation, and sustainability in post-conflict environments. The study calls for targeted, context-sensitive policy interventions aimed at strengthening institutional frameworks, enhancing infrastructure and digital access, expanding financial inclusion, and fostering coordinated market support. Addressing these systemic barriers is critical to cultivating a resilient, inclusive entrepreneurial ecosystem that underpins sustainable economic recovery and long-term development in the Northern Province of Sri Lanka.