"We document the presence of multiple and varied constraints to small and medium firm growth. This presents both a practical problem for business training programs and a challenge to academic economists trying to identify mechanisms through which these programs may affect outcomes. External validity needs theory. This pushes researchers to narrowly defined and highly selected sample frames, which limits the potential for clear, generalizable policy prescriptions. Ultimately, larger samples, multi-arm evaluations, process documentation, and narrowly-focused, theory-supported empirical work are all needed, but the complexity of the problem limits what we learn from any single study."
"This paper explores the effectiveness of goal setting and accountability within group-based entrepreneurship initiatives in creating human capital. The study uses a randomized cluster trial to compare the experimental and control groups of entrepreneurs. The results suggest that frequent goal setting and accountability in group settings provides a greater number of learning experiences and human capital development opportunities available to entrepreneurs than those that did not engage in the same level of goal setting."
"This paper attempts to assess the impacts of a management training program on the business performance of small enterprises in a metalworking cluster in Nairobi, Kenya. Based on the observed differences in management between successful and less successful enterprises, we designed a management training program featuring the basics of KAIZEN, an inexpensive, commonsense approach to management emphasizing the reduction of wasted work and materials, for the less successful enterprises.
This paper finds that business owners operating smaller enterprises tended to be self-selected into training participation. The training effects combined with the self-selection effect, which we estimate with panel data, were statistically significant and particularly stronger on profits than on sales revenues, while other training programs that did not teach KAIZEN had positive effects on sales revenues, not profits. As a result, the participants caught up with and overtook the non-participants in terms of average sales revenues and average profits, respectively."
"Standard business training programs aim to boost the incomes of the millions of self-employed business owners in developing countries by teaching basic financial and marketing practices, yet the impacts of such programs are mixed. We tested whether a psychology-based personal initiative training approach, which teaches a proactive mindset and focuses on entrepreneurial behaviors, could have more success. A randomized controlled trial in Togo assigned microenterprise owners to a control group (n = 500), a leading business training program (n = 500), or a personal initiative training program (n = 500). Four follow-up surveys tracked outcomes for firms over 2 years and showed that personal initiative training increased firm profits by 30%, compared with a statistically insignificant 11% for traditional training. The training is cost-effective, paying for itself within 1 year."
"As part of its Agribusiness Innovation Program (AIP), infoDev designed an agribusiness incubation training program. To-date, the Agribusiness Incubation Training has been provided to a total of 149 people from 25 countries, including countries from Africa, Asia, Eastern Europe and Latin America. This report analyzes the effects of the delivery of this training. The agribusiness incubation training sessions took place as a one-day-training1 in the context of seven different events."
"Recent field experiments demonstrate that advice, mentorship, and feedback from randomly assigned peers improve entrepreneurial performance. These results raise a natural question: what is preventing entrepreneurs and managers from forming these peer connections themselves? We argue that entrepreneurs may be under-networked because they lack the necessary social skills- the ability to communicate effectively and interact collaboratively with new acquaintances-that allow them to match efficiently with knowledgeable peers. We use a field experiment in the context of a business training program to test if a short social skills training module improves who the participants choose to learn from within the program. We find that entrepreneurs who were exposed to the social skills training formed 50% more relationships with peers. These relationships exhibited more matching based on managerial skill and were more ethnically diverse. Finally, the training also substantially increased entrepreneurs' business performance. Our findings suggest that social skills help entrepreneurs build relationships that create value for both themselves and their peers."
"Identifying the determinants of entrepreneurship is an important research and policy goal, especially in emerging market economies where lack of capital and supporting infrastructure often impose stringent constraints on business growth. This paper studies the impact of a comprehensive business and financial literacy programme on firm outcomes of young entrepreneurs in an emerging post-conflict economy, Bosnia and Herzegovina. The authors conduct a randomised control trial and find that, while the training programme did not influence business survival, it significantly improved business practices, investments and loan terms for surviving businesses. Female-run businesses further exhibited some improvements in business performance and sales."
"Despite the popularity of business training among policy makers, the use of business training has faced increasing skepticism. This is, in part, fueled by the fact that most of the first wave of randomized experiments in developing countries could not detect statistically significant impacts of training on firms' profits or sales. This paper revisits and reassesses the evidence for whether small business training works, incorporating the results of more recent studies. A meta-analysis of these estimates suggests that training increases profits and sales on average by 5 to 10 percent. The author argues that this is in line with what is optimistic to expect given the relatively short length of most training programs, and the expected return on investment from the cost of such training. However, impacts of this magnitude are too small for most experiments to detect statistically. Emerging evidence is provided on five approaches for improving the effectiveness of traditional training by incorporating gender, kaizen methods, localization and mentoring, heuristics, and psychology. Training programs that incorporate these elements appear to deliver improvements over traditional training programs on average, although with considerable variation. Given that training delivers some benefits for firms, the challenge is then how to deliver a quality program on a cost-effective basis at a much larger scale. Three possible approaches to scaling up training are discussed: using the market, using technology, or targeting and funneling firms."
"Identifying the determinants of entrepreneurship is an important research and policy goal, especially in emerging market economies where lack of capital and supporting infrastructure often imposes stringent constraints on business growth. This paper studies the impact of a comprehensive business and financial literacy program on firm outcomes of young entrepreneurs in an emerging post-conflict economy, Bosnia and Herzegovina. The authors conduct a randomized control trial and find that while the training program did not influence business survival, it significantly improved business practices, investments, and loan terms for surviving businesses. Entrepreneurs with higher ex-ante financial literacy further exhibited some improvements in business performance and sales."
"The purpose of this paper is to examine how entrepreneurial orientation (EO) and the use of management accounting practices (MAPs) in decision making affects the profitability of small- and medium-sized enterprises (SMEs), and also to analyze the extent to which EO and the use of MAPs affects profitability differently in growing and non-growing SMEs.
EO and MAPs have a positive effect on profitability in non-growing SMEs, but the combined effect of EO and MAPs has no additional effect. However, for growing SMEs, high usage of MAPs in decision making is a prerequisite for EO to influence profitability. This study is the first to use the resource-based view to examine the relationship between two dimensions of resource organization and SME profitability. EO is used as a proxy for how resources are organized in order to identify opportunities, and MAPs are used as a proxy for how efficiently resources are organized."