Business Training and Female Enterprise Start-Up, Growth, and Dynamics: Experimental Evidence from Sri Lanka

By S. D. Mel, David J. McKenzie, Christopher Woodruff. Social Science Research Network, 2012

395 citations recorded by the source corpus.

The authors conduct a randomized experiment among women in urban Sri Lanka to measure the impact of the most commonly used business training course in developing countries, the Start-and-Improve Your Business program. They work with two representative groups of women: a random sample of women operating subsistence enterprises and a random sample of women who are out of the labor force but interested in starting a business. They track the impacts of two treatments -- training only and training plus a cash grant -- over two years with four follow-up surveys and find that the short and medium-term impacts differ. For women already in business, training alone leads to some changes in business practices but has no impact on business profits, sales or capital stock. In contrast, the combination of training and a grant leads to large and significant improvements in business profitability in the first eight months, but this impact dissipates in the second year. For women interested in starting enterprises, business training speeds up entry but leads to no increase in net business ownership by the final survey round. Both profitability and business practices of the new entrants are increased by training, suggesting training may be more effective for new owners than for existing businesses. The study also finds that the two treatments have selection effects, leading to entrants being less analytically skilled and poorer.

Subfields: Economics and Econometrics, Gender Studies, Safety Research

View Paper: https://www.semanticscholar.org/paper/94d66240edabe096eb6a3bafd2414722b673a4a5

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Citations in the corpus

Growing Markets through Business Training for Female Entrepreneurs: A Market-Level Randomized Experiment in Kenya (2017, background): “…training may be less effective for female business owners, either because they work in sectors with very low efficient scales or because they face many other constraints that limit the ability of their businesses to grow (e.g. de Mel et al., 2014; Berge et al., 2015; Giné and Mansuri, 2016).”
What are We Learning from Business Training and Entrepreneurship Evaluations Around the Developing World? (2012, background): “Because studies of other microenterprise interventions (De Mel et al. 2009b) often find differences by gender, we separate results by gender to the extent possible.”
Promoting Women's Economic Empowerment: What Works? (2014, background): “-Treatment impacts significant for larger, male-owned enterprises. de Mel, McKenzie, and Woodruff (2012) Long-term effects of one- time capital transfers to microenterprises in urban Sri Lanka 408 microentrepreneurs (50% women) Grants of $100 or $200 in cash or in-kind; five year follow-up…”
Entrepreneurship Programs in Developing Countries: A Meta Regression Analysis (2013, background): “…little impact on business set-up despite large positive impacts on intermediate outcomes such as business knowledge and psycho-social well-being; De Mel et al. (2012) investigated the impacts of business training and grants on the set-up and growth of female enterprises in Sri Lanka, and found…”
How does microfinance enhance entrepreneurial outcomes in emerging economies? The mediating mechanisms of psychological and social capital (2014, background): “Other work examining the impact of one-off financial grants on entrepreneurial outcomes also reveals inconclusive results (De Mel et al., 2009, 2012b; Fafchamps et al., 2011).”
ACHIEVING THE SUSTAINABLE DEVELOPMENT GOALS (2016, background): “…Lanka found that business training alone has no impact on business profits, but the combination of training and a cash payment—aimed to simulate credit— leads to large and significant improvements in business profitability, although this impact dissipates in the second year (de Mel et al. 2014).”
Do Interventions Targeted at Micro-Entrepreneurs and Small and Medium-Sized Firms Create Jobs? A Systematic Review of the Evidence for Low and Middle Income Countries (2014, background): “Only de Mel et al. (2013b) systematically assess the effect of the wage subsidy on outcomes such as management practices, investment, sales, profits and personal income.”
Women and Work in India: Descriptive Evidence and a Review of Potential Policies (2017, background): “In nearby Sri Lanka, business training plus cash grants were more effective at increasing profitability of femaleowned businesses (De Mel et al., 2014).”
Entrepreneurship Education and Entry into Self-Employment Among University Graduates (2016, background): “Most studies on business training analyze whether the skills of existing entrepreneurs can be strengthened to improve their productivity (for a review, see McKenzie & Woodruff, 2014).”