Business Literacy and Development: Evidence from a Randomized Controlled Trial in Rural Mexico
Year: 2013
Type: book
Abstract: This paper explores whether the poor performance of many micro-enterprises can be explained by a lack of basic business skills.We randomized the offer of a free, 48-hour business skills course to female entrepreneurs in rural Mexico.We find that those assigned to treatment earn higher profits, have larger revenues, serve a greater number of clients, are more likely to use formal accounting techniques, and more likely to be registered with the government.Economically significant indirect treatment effects on those entrepreneurs randomized out of the program, yet living in treatment villages are observed.We present a simple model that helps interpret our results, and consistent with the theoretical predictions, we find that entrepreneurs with lower baseline profits are the most likely to quit their business post-treatment, and that the positive impacts of the treatment are increasing in entrepreneurial quality.
Authors: Gabriela Calderón, Jesse M. Cunha
Institution: Naval Postgraduate School
Language: English
Subfield: Management of Technology and Innovation
Domain: Social Sciences
Open Access status: gold
OpenAlex ID: W3002496243