Abstract:
Ceylon cinnamon grown and produced in Sri Lanka has acquired a long-standing reputation in
the international market. As the fourth largest foreign exchange earner cinnamon plays a
significant role in the Sri Lankan economy. Sri Lanka holds a monopoly in Ceylon cinnamon in
the world market. Hence, Ceylon cinnamon has opened undisputed windows of opportunity for
value chain actors including farmers to display entrepreneurial spirit. However, cinnamon
farmers are not equipped to exploit this opportunity due to poor entrepreneurial orientation
(EO). This study aims to empirically examine the influence of EO on farm business performance,
moderating role of farm and farmer characteristics, and on-farm and off-farm diversification to
the EO- performance relationship. Galle district was selected for the study due to the district
being the country's main cinnamon producing area. Primary and secondary data were used, and
interviewer-administrated questionnaires and structured interviews were used as data
collection tools. The sample comprised of 100 cinnamon farmers selected by using a stratified
sampling technique. The data were analyzed using descriptive statistics and structural equation
modeling technique. Results revealed that entrepreneurially oriented farmers achieved better
financial performance. However, entrepreneurial orientation did not contribute to non-financial
performance aspects of farm operation. Farm and farmer characteristics did not moderate the
EO-performance relationship. Further, farmers who engage in on-farm and off-farm
diversification activities did not contribute to enhance business performance. Entrepreneurially
oriented farmers with better farm and farmer characteristics along with engagement in on-farm
and off-farm diversification practices paid less attention to cinnamon cultivation due to lack of
time. This has led to failure of achieving better business performance
