TY - JOUR
T1 - Consulting and capital experiments with microenterprise tailors in Ghana
AU - Karlan, Dean
AU - Knight, Ryan
AU - Udry, Christopher
N1 - Funding Information:
The authors thank USAID-BASIS and the Bill and Melinda Gates Foundation for funding, Matt Hoover for project management and research assistance, the field staff at Innovations for Poverty Action (IPA) for survey and project management, and the IPA Ghana country directors, Justin Oliver, Kelly Bidwell and Jessica Kiessel. The authors thank the Ernst & Young Ghana office for their collaboration. Institutional Review Board approval received from both Yale University and Innovations for Poverty Action. The authors retained full intellectual freedom to report and interpret the results throughout the study. All opinions herein are our own and not those of any of the donors or partners.
Publisher Copyright:
© 2015 Elsevier B.V.
PY - 2015/10/1
Y1 - 2015/10/1
N2 - We conducted a randomized trial in urban Ghana in which tailoring microenterprises received advice from an international consulting firm, cash, both, or neither. We designed the study with a hypothesis that large infusions of financial and managerial capital could be transformative. We find that all three treatments led to their immediate intended effects: changed business practices and increased investment. However, no treatment led to higher profits on average, and certainly not to the large effects hypothesized. In fact, each treatment at some point led to lower profits. Then, in the long run, we find that the microentrepreneurs in either consulting treatment group reverted back to their prior business practices, and that microentrepreneurs in the cash treatment group reverted back to their prior scale of operations.
AB - We conducted a randomized trial in urban Ghana in which tailoring microenterprises received advice from an international consulting firm, cash, both, or neither. We designed the study with a hypothesis that large infusions of financial and managerial capital could be transformative. We find that all three treatments led to their immediate intended effects: changed business practices and increased investment. However, no treatment led to higher profits on average, and certainly not to the large effects hypothesized. In fact, each treatment at some point led to lower profits. Then, in the long run, we find that the microentrepreneurs in either consulting treatment group reverted back to their prior business practices, and that microentrepreneurs in the cash treatment group reverted back to their prior scale of operations.
KW - Business training
KW - Consulting
KW - Credit constraints
KW - Entrepreneurship
KW - Managerial capital
UR - http://www.scopus.com/inward/record.url?scp=84942552541&partnerID=8YFLogxK
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U2 - 10.1016/j.jebo.2015.04.005
DO - 10.1016/j.jebo.2015.04.005
M3 - Article
AN - SCOPUS:84942552541
SN - 0167-2681
VL - 118
SP - 281
EP - 302
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
ER -
