Consulting and capital experiments with microenterprise tailors in Ghana

Dean Karlan*, Ryan Knight, Christopher Udry

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

39 Scopus citations


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.

Original languageEnglish (US)
Pages (from-to)281-302
Number of pages22
JournalJournal of Economic Behavior and Organization
StatePublished - Oct 1 2015


  • Business training
  • Consulting
  • Credit constraints
  • Entrepreneurship
  • Managerial capital

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management


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