Impact of Credit and Training on Enterprise Performance: Evidence from Urban Ethiopia

30 Pages Posted: 27 Jun 2019

See all articles by Abdelkrim Araar

Abdelkrim Araar

Université Laval

Yesuf Awel

United Nations Economic Commission for Africa

Jonse Bane Boka

Addis Ababa University

Hiywot Girma

University of Johannesburg

Ajebush Shafi

Tshwane University of Technology - Business School

Eleni Abraham Yitbarek

Maastricht University

Mulatu Zerihun

Tshwane University of Technology

Date Written: June 26, 2019

Abstract

This study evaluates the impact of business-development-support programs (credit, training, and a combination of both) on the performance of micro- and small enterprises (MSEs) in Ethiopia. Using 2015 Ethiopian urban survey data and employing endogenous-switching regressions for multiple treatments, we document a positive and significant effect of credit, training, and a combination of training and credit on MSEs. Our results highlight the heterogeneity in treatment effects between women- and men-owned MSEs: women-owned businesses do not benefit from access to treatments. Our results suggest that improving the performance of MSEs requires fine-tuned interventions that meet the specific needs of men and women who own small businesses rather than one-size-fits-all programs.

Keywords: Treatment effects, MSEs, Ethiopia

JEL Classification: C31, J16, M21

Suggested Citation

Araar, Abdelkrim and Awel, Yesuf and Boka, Jonse Bane and Girma, Hiywot and Shafi, Ajebush and Yitbarek, Eleni Abraham and Zerihun, Mulatu, Impact of Credit and Training on Enterprise Performance: Evidence from Urban Ethiopia (June 26, 2019). Partnership for Economic Policy Working Paper No. 2019-13. Available at SSRN: https://ssrn.com/abstract=3410577 or http://dx.doi.org/10.2139/ssrn.3410577

Abdelkrim Araar (Contact Author)

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Yesuf Awel

United Nations Economic Commission for Africa ( email )

Addis Ababa
Ethiopia

Jonse Bane Boka

Addis Ababa University ( email )

King George VI St
Addis Ababa, 1000
Ethiopia

Hiywot Girma

University of Johannesburg ( email )

PO Box 524
Auckland Park
Johannesburg, Gauteng 2006
South Africa

Ajebush Shafi

Tshwane University of Technology - Business School ( email )

Staatsartillerie Rd
Philip Nel Park
Pretoria, 0183
South Africa

Eleni Abraham Yitbarek

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Mulatu Zerihun

Tshwane University of Technology ( email )

Staatsartillerie Rd
Philip Nel Park
Pretoria, 0183
South Africa

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