Human and Financial Capital for Microenterprise Development: Evidence from a Field and Lab Experiment
Lars Ivar Oppedal Berge
Norwegian School of Economics (NHH)
Norwegian School of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute)
Norwegian School of Economics (NHH) - Department of Economics
January 12, 2011
NHH Dept. of Economics Discussion Paper No. 1/2011
Which is the most binding constraint to microenterprise development, human capital or financial capital? To answer this question, we present the first field experiment that jointly investigates these two constraints for poor microentrepreneurs, by introducing separate treatments of business training and a business grant. We combine survey data and data from a lab experiment to investigate treatment effects on business results, business practices, business skills and mind-set. Our study demonstrates a strong effect of business training on male entrepreneurs, while the effect on female entrepreneurs is much more muted. There is no effect of the business grant for either males or females. The results suggest that human capital may be the more important constraint for poor microentrepreneurs, but also point to the need for more comprehensive measures to promote development among female entrepreneurs.
Number of Pages in PDF File: 54
Date posted: January 31, 2011
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