Human and Financial Capital for Microenterprise Development: Evidence from a Field and Lab Experiment

54 Pages Posted: 31 Jan 2011  

Lars Ivar Oppedal Berge

Norwegian School of Economics (NHH)

Kjetil Bjorvatn

Norwegian School of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute)

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics

Date Written: January 12, 2011

Abstract

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.

Suggested Citation

Berge, Lars Ivar Oppedal and Bjorvatn, Kjetil and Tungodden, Bertil, Human and Financial Capital for Microenterprise Development: Evidence from a Field and Lab Experiment (January 12, 2011). NHH Dept. of Economics Discussion Paper No. 1/2011. Available at SSRN: https://ssrn.com/abstract=1750026 or http://dx.doi.org/10.2139/ssrn.1750026

Lars Ivar Oppedal Berge

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

Kjetil Bjorvatn (Contact Author)

Norwegian School of Economics and Business Administration ( email )

Helleveien 30
N-5035 Bergen
Norway
47-55 9595 85 (Phone)
47-55 9595 43 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

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