Entrepreneurship


Original abstracts from the papers in the database are provided below. All abstracts are drawn directly from the papers referenced. Links to access the papers are provided, although
the papers may also be available from other web sources. By providing links to other sites, the United Nations Foundation and ExxonMobil Foundation do not guarantee, approve, or endorse the information or products available on these sites.

  • Empowering Adolescent Girls: Evidence from a Randomized Control Trial in Uganda

    Bandiera et al (2012)

    Original abstract:

    Nearly 60% of Uganda's population is aged below 20. This generation faces health challenges associated with HIV, coupled with economic challenges arising from an uncertain transition into the labor market. We evaluate the impacts of a programme designed to em- power adolescent girls against both challenges through the simultaneous provision of: (i) life skills to build knowledge and reduce risky behaviors; (ii) vocational training enabling girls to establish small-scale enterprises. The randomized control trial tracks 4,800 girls over two years. The programme significantly improves HIV and pregnancy related knowledge, as well as corresponding risky behaviors: among those sexually active, self-reported routine condom usage increases by 50%. Furthermore, from a baseline of 21%, there is the near elimination of girls reporting having recently had sex unwillingly. On outcomes related to vocational training, the intervention raised the likelihood of girls being engaged in income generating activities by 35%, mainly driven by increased participation in self-employment. The findings suggest combined interventions might be more effective among adolescent girls than single-pronged interventions aiming to change risky behaviors solely through related education programmes, or to improve labor market outcomes solely through vocational training.

    Intervention settings: Rural and Peri-urban

    Intervention description: Livelihood (vocational) and life skills training over first two years of the program.

    Methodology: RCT

    Sample: 4,800 young women (aged 14-20).

    Findings: 35% increase in likelihood to be engaged in an income generating activity. 76% increase in likelihood to be self-employed. 46% increase in hours spent in self-employment on a typical day. 17% decrease in likelihood to be in wage-labor (imprecisely estimated). 31% decrease in hours spent in wage-labor on a typical day (imprecisely estimated). Personal monthly expenditure on goods specific to young females higher by 33%. Income from self-employment higher, wage labor lower.

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  • When is Capital Enough to Get Microenterprises Growing? Evidence from a Randomized Experiment in Ghana

    Fafchamps et al (2010)

    Original abstract:

    Standard models of investment predict that credit-constrained firms should grow rapidly when given additional capital, and that how this capital is provided should not affect decisions to invest in the business or consume the capital. We randomly gave cash and in-kind grants to male- and female-owned microenterprises in urban Ghana. Our findings cast doubt on the ability of capital alone to stimulate the growth of female microenterprises. First, while the average treatment effects of the in-kind grants are large and positive for both males and females, the gain in profits is almost zero for women with initial profits below the median, suggesting that capital alone is not enough to grow subsistence enterprises owned by women. Second, for women we strongly reject equality of the cash and in-kind grants; only in-kind grants lead to growth in business profits. The results for men also suggest a lower impact of cash, but differences between cash and in-kind grants are less robust. The difference in the effects of cash and in-kind grants is associated more with a lack of self-control than with external pressure. As a result, the manner in which funding is provided affects microenterprise growth.

    Intervention settings: Urban.

    Intervention description: Capital grants in cash or in-kind ($120) as proxy to credit.

    Methodology: RCT.

    Sample: Entrepreneurs (more than half of sample).

    Findings: Both cash and in-kind grants had positive impact on men's businesses. In-kind grants led to higher profits only for women with initially larger, higher-profit businesses. No significant impact on per capita expenditure. No overall impact of grants on women's business investment or income; heterogeneous impact that depends on initial business size and profitability, and type of capital injection (in-kind have positive impact on more successful firms). Cash grants have no impact on women's businesses; tend to be used for HH expenses. No impact of grants on profits of women with initially below average profit businesses.

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  • Entrepreneurship Training and Self-Employment Among University Graduates: Evidence from a Randomized Trial in Tunisia

    Premand, Brodmann, Almeida, Grun and Barouni (2012)

    Original abstract:

    In economies characterized by low labor demand and high rates of youth unemployment, entrepreneurship training has the potential to enable youth to gain skills and create their own jobs. This paper presents experimental evidence on a new entrepreneurship track that provides business training and personalized coaching to university students in Tunisia. Undergraduates in the final year of licence appliquee were given the opportunity to graduate with a business plan instead of following the standard curriculum. This paper relies on randomized assignment of the entrepreneurship track to identify impacts on labor market outcomes one year after graduation. The analysis finds that the entrepreneurship track was effective in increasing self-employment among applicants, but that the effects are small in absolute terms. In addition, the employment rate among participants remains unchanged, pointing to a partial substitution from wage employment to self-employment. The evidence shows that the program fostered business skills, expanded networks, and affected a range of behavioral skills. Participation in the entrepreneurship track also heightened graduates optimism toward the future shortly after the Tunisian revolution.

    Intervention settings: Urban

    Intervention description: Entrepreneurship track where students received business training, personalized coaching, and supervision in development and finalization of business plan. Option of possibility to join business plan competition.

    Methodology: RCT

    Sample: 1,499 non-poor university graduates, both male and female.

    Findings: 6% increase in self-employment rates of males and 3% for females after one year. Program fostered business skills, expanded networks and affected a range of behavioral skills. Participation heightened graduates' sense of opportunities and optimism for the future.

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  • The Miracle of Microfinance? Evidence from a Randomized Evaluation

    Banerjee et al (2013)

    Original abstract:

    Microcredit has spread extremely rapidly since its beginnings in the late 1970s, but whether and how much it helps the poor is the subject of intense debate. This paper reports on the first randomized evaluation of the impact of introducing microcredit in a new market. Half of 104 slums in Hyderabad, India were randomly selected for opening of an MFI branch while the remainder were not. We show that the intervention increased total MFI borrowing, and study the effects on the creation and the profitability of small businesses, investment, and consumption. Fifteen to 18 months after lending began in treated areas, there was no effect of access to microcredit on average monthly expenditure per capita, but expenditure on durable goods increased in treated areas and the number of new businesses increased by one third. The effects of microcredit access are heterogeneous: households with an existing business at the time of the program invest more in durable goods, while their nondurable consumption does not change. Households with high propensity to become new business owners increase their durable goods spending and see a decrease in nondurable consumption, consistent with the need to pay a fixed cost to enter entrepreneurship. Households with low propensity to become business owners increase their nondurable spending. We find no impact on measures of health, education, or women's decision-making.

    Intervention settings: Urban (Hyderabad).

    Intervention description: Group liability credit in the amount of $200 (at market exchange rates, or $1,00 in PPP-adjusted rates) offered to groups of 6 to 10 women. Loan amounts may increase up to double on successful repayment. Also offered mortgage and insurance products, and savings accounts.

    Methodology: RCT.

    Sample: 2,800 adult, very poor women from slums.

    Findings: 32% higher new business creation. Positive impact on business formation among female-headed HH and on business investment among HHs with existing businesses. Female-headed HH in intervention areas more likely to start new business. No significant impact on average total per capita expenditure; or women's business revenues, profits or number of employees. No impact on number of employees in women's businesses. No significant impact on women's business revenues or profits. No impact on women's decision-making on HH spending.

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  • The Economic Returns to Social Interaction: Experimental Evidence from Microfinance

    Feigenberg et al. (2011)

    Original abstract:

    Microfinance clients were randomly assigned to repayment groups that met ei- ther weekly or monthly during their first loan cycle, and then graduated to identical meeting frequency for their second loan. Long-run survey data and a follow-up pub- lic goods experiment reveal that clients initially assigned to weekly groups interact more often and exhibit a higher willingness to pool risk with group members from their first loan cycle nearly two years after the experiment. They were also three times less likely to default on their second loan. Evidence from an additional treat- ment arm show that, holding meeting frequency fixed, the pattern is insensitive to repayment frequency during the first loan cycle. Taken together, these findings con- stitute the first experimental evidence on the economic returns to social interaction, and provide an alternative explanation for the success of the group lending model in reducing default risk.

    Intervention settings: Urban and peri-urban.

    Intervention description: Individual liability loans. Tested the impact of meeting frequency and social interaction on repayment rates of individual-liability loans.

    Methodology: RCT.

    Sample: First time microfinance bank clients living in peri-urban slums in the city of Kolkata. Over 70% owned a business and median client's HH income just below a dollar a day. 100% women.

    Findings: In the absence of group liability and enforcement, more frequent group meetings led to greater social interaction and reduced default rates.

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