The Impact of Financial Education of Managers on Medium and Large Enterprises – A Randomized Controlled Trial in Mozambique

73 Pages Posted: 18 Sep 2019 Last revised: 25 Sep 2019

See all articles by Claudia Custodio

Claudia Custodio

Imperial College London; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Diogo Mendes

New University of Lisbon - Nova School of Business and Economics

Daniel Metzger

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); European Corporate Governance Institute (ECGI); London School of Economics & Political Science (LSE) - Financial Markets Group

Date Written: September 10, 2019

Abstract

This paper studies the impact of a financial education program for top managers of medium and large enterprises in Mozambique through a randomized controlled trial (RCT). We use survey data and financial reporting data to show consistent evidence that managers adjust some financial policies in response to the education program. The largest treatment effects are on short-term financial policies related to working capital, generating a positive impact on cash flows due to reductions in account receivables and inventories. There is also a smaller but significant, positive impact on long-term investment. These firm policy changes improve the firm performance of the treated firms. Overall, our results suggest that relatively small and low-cost interventions, such as a short executive education program in finance, improve financial practices and can affect economic development.

Keywords: Financial Literacy, Financial Education, RCT, Financing Constraints, CEOs

JEL Classification: D4, G21, J24, L25, M41, O16

Suggested Citation

Custodio, Claudia and Mendes, Diogo and Metzger, Daniel, The Impact of Financial Education of Managers on Medium and Large Enterprises – A Randomized Controlled Trial in Mozambique (September 10, 2019). Available at SSRN: https://ssrn.com/abstract=3450851 or http://dx.doi.org/10.2139/ssrn.3450851

Claudia Custodio

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Diogo Mendes

New University of Lisbon - Nova School of Business and Economics ( email )

Campus de Campolide
Lisbon, 1099-032
Portugal

Daniel Metzger (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

London School of Economics & Political Science (LSE) - Financial Markets Group ( email )

Houghton Street
London WC2A 2AE
United Kingdom

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