The Catch-22 of External Validity in the Context of Constraints to Firm Growth

9 Pages Posted: 2 Mar 2015 Last revised: 21 Apr 2023

See all articles by Greg Fischer

Greg Fischer

London School of Economics & Political Science (LSE) - Department of Economics

Dean S. Karlan

Yale University; Northwestern University - Kellogg School of Management; Innovations for Poverty Action; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

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Date Written: February 2015

Abstract

We document the presence of multiple and varied constraints to small and medium firm growth. This presents both a practical problem for business training programs and a challenge to academic economists trying to identify mechanisms though which these programs may affect outcomes. External validity needs theory. This pushes researchers to narrowly defined and highly selected sample frames, which limits the potential for clear, generalizable policy prescriptions. Ultimately, larger samples, multi-arm evaluations, process documentation, and narrowly-focused, theory-supported empirical work are all needed, but the complexity of the problem limits what we learn from any single study.

Suggested Citation

Fischer, Greg and Karlan, Dean S. and Karlan, Dean S., The Catch-22 of External Validity in the Context of Constraints to Firm Growth (February 2015). NBER Working Paper No. w20971, Available at SSRN: https://ssrn.com/abstract=2572130

Greg Fischer (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economics ( email )

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Dean S. Karlan

Yale University ( email )

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR) ( email )

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