The Impact of Financial Education of Executives on Financial Practices of Medium and Large Enterprises
83 Pages Posted: 18 Sep 2019 Last revised: 20 Jul 2021
Date Written: July 20, 2021
This paper studies the impact of a course in finance for executives of medium and large enterprises on firm policies and performance through a randomized controlled trial (RCT) in Mozambique. Survey data and accounting data provide consistent evidence that managers change firm financial policies in response to finance education. Reductions in working capital generate an increase in cash flows used to finance long-term investments. Those changes improve the performance of the treated firms. Overall, our results suggest that relatively small and low-cost interventions can help firms to mitigate financial constraints and potentially affect economic development.
Keywords: Financial Literacy, Financial Education, RCT, Financing Constraints, CEOs
JEL Classification: D4, G30, J24, L25, M41, O16
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