Tag
entrepreneurship
7 findings
Firms & operationsEntrepreneurial Experimentation HypothesisInitial adoption of business practices increased management scores by 5.65 percentage points at 6 months (p < 0.01) and capital grants increased short-run investments by 179 cedis (p < 0.10). However, treatments led to non-positive or negative income shifts (capital treatment reduced stated income by 45.43 cedis, p < 0.05), causing microentrepreneurs to abandon new business practices and revert back to baseline scale within 1 to 2 years.RCTEconomics (general)Heterogeneous Entrepreneurial TalentA small minority of high-talent entrepreneurs like "Sarah" increased profits from 90 GH¢ to 333 GH¢ (a 270% increase vs. average control increase of 109 GH¢) by adopting marketing and employee management, whereas low-talent entrepreneurs like "Jess" only grew profits from 30 GH¢ to 80 GH¢. On average, the tailors mirrored "Jess", leading to zero aggregate profit growth across treatment groups.RCTFinance & microfinanceHigh-Return Illiquid Business OpportunitiesMicro-entrepreneurs undertaking illiquid investments experienced 80% higher long-run business capital, higher profit variance across months (an average Rs 600 wider gap between high and low profit months), a 9 percentage point increase in extending customer trade credit, a 10 percentage point increase in customer pre-orders, and reduced long-run business closure rates (31.4% treatment vs 38.6% control).RCTEconomics (general)Negative Peer-Composition EffectAverage peer baseline quality exerts a statistically significant negative effect on intensive proposal quality ($\beta = -0.424, p < 0.05$ in full sample; $\beta = -0.350, p < 0.10$ in M0 completers). The share of peers with prior business experience also displays a strong negative effect on intensive quality ($\beta = -1.539, p < 0.01$ in full sample; $\beta = -1.600, p < 0.01$ in M0 completers).RCTFinance & microfinanceEntrepreneurial Venture Creation RateNew business formation was 2.0% among regular contract clients versus 4.58% to 4.68% among grace period clients (a 2.58 to 2.68 percentage point increase, p < 0.05), representing more than double to nearly triple the rate of new venture creation.RCTFinance & microfinancePeer-Based Selection of MicroentrepreneursEntrepreneurs ranked in the top third by peers achieved monthly returns of 24% to 30% on cash grants (around 3 times the average return of 10% to 11%), and combining observable traits with peer information yielded 38% monthly returns.RCTEconomics (general)Self-Employment Decoupling from Liquidity ConstraintsWinning a 1M SEK windfall reduces self-employment income by 0.051 SEK per 100 SEK won (p = 0.088), representing a 7.72% reduction relative to baseline mean self-employment income (6,598 SEK), which is a larger proportional drop than wage earnings (-5.49%); self-employment participation drops by 0.139 percentage points per 1M SEK won (p = 0.491), contradicting theories that liquidity shocks promote entrepreneurial entry.RCT