Nexus Between Transaction Cost and Livelihood Success of <em>Samurdhi</em> Beneficiaries in Sri Lanka

Abstract

The study explores the effect of transaction costs on the livelihood success of Samurdhi beneficiaries in Sri Lanka. Data were collected from 1820 Samurdhi beneficiaries selected from Sabaragamuwa and Uva provinces employing a multi-stage sampling method, while a well-structured questionnaire was equipped for the data collection process. Data analysis was done with the help of Partial Least Square Structural Equation Modeling (PLS-SEM). The current study tested four hypothetical relationships between four dimensions of transaction cost; searching cost, negotiation cost, monitoring cost, enforcement cost, and livelihood success of Samurdhi beneficiaries. The transaction cost of beneficiaries was assessed from both the marketing perspective and the Samurdhi activities perspective. The result revealed that there exists a negative association between transaction costs and the livelihood success of Samurdhi beneficiaries. Results further exhibit that searching costs and monitoring costs are higher on the marketing side. When moving to the Samurdhi activities context, there showed high costs related to negotiation and enforcement. Thus, the research confirmed that transaction costs have a negative impact on the livelihood success of Samurdhi beneficiaries in Sri Lanka. Developing a mechanism to empower Samurdhi beneficiaries to access information relating to the transaction using modern technology to contact reliable transaction partners and integrate them with the market properly and reducing complex administration processes that led to the waste of money and time of Samurdhi beneficiaries would lead to improving livelihoods of Samurdhi beneficiaries by minimising transaction costs.