Business literacy and development: Evidence from a randomized controlled trial in rural Mexico
Authors
Calderon, Gabriela
Cunha, Jesse M.
De Giorgi, Giacomo
Subjects
Business literacy
economic development
micro-enterprise.
economic development
micro-enterprise.
Advisors
Date of Issue
2013-12
Date
2013-12
Publisher
Banco de Mexico
Language
en_US
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 predic- tions, 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.
Type
Article
Description
Series/Report No
Department
Graduate School of Business & Public Policy (GSBPP)
Business and Public Policy (GSBPP)
Organization
Naval Postgraduate School (U.S.)
Identifiers
NPS Report Number
Sponsors
Funder
Social Science Research Council, Severo Ochoa Programme for Centres of Excellence and several institutions at Stanford University: SCID, FSI, the Michelle R. Clayman Institute for Gender Research, the Graduate Research Opportunity, and SEED
Format
46 p.
Citation
Calderon, Gabriela; Cunha, Jesse M.; De Giorgi, Giacomo (2013) : Business literacy and development: Evidence from a randomized controlled trial in rural Mexico, Working Papers, No. 2013-24, Banco de México, Ciudad de México
Distribution Statement
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.