Social Skills Improve Business Performance: Evidence from a Randomized Control Trial with Entrepreneurs in Togo

81 Pages Posted: 6 Oct 2019 Last revised: 26 Jun 2020

See all articles by Stefan Dimitriadis

Stefan Dimitriadis

University of Toronto - Strategic Management

Rembrand Koning

Harvard University - Business School (HBS)

Date Written: June 25, 2020

Abstract

Recent field experiments demonstrate that advice, mentorship, and feedback from randomly assigned peers improve entrepreneurial performance. These results raise a natural question: what is preventing entrepreneurs and managers from forming these peer connections themselves? We argue that entrepreneurs may be under-networked because they lack the necessary social skills— the ability to communicate effectively and interact collaboratively with new acquaintances—that allow them to match efficiently with knowledgeable peers. We use a field experiment in the context of a business training program to test if a short social skills training module improves who the participants choose to learn from within the program. We find that entrepreneurs who were exposed to the social skills training formed 50% more relationships with peers. These relationships exhibited more matching based on managerial skill and were more ethnically diverse. Finally, the training also substantially increased entrepreneurs’ business performance. Our findings suggest that social skills help entrepreneurs build relationships that create value for both themselves and their peers.

Keywords: social skills, entrepreneurship, business relationships, developing country, field experiment

Suggested Citation

Dimitriadis, Stefan and Koning, Rembrand, Social Skills Improve Business Performance: Evidence from a Randomized Control Trial with Entrepreneurs in Togo (June 25, 2020). Available at SSRN: https://ssrn.com/abstract=3459643 or http://dx.doi.org/10.2139/ssrn.3459643

Stefan Dimitriadis

University of Toronto - Strategic Management ( email )

Canada

Rembrand Koning (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Boston, MA 02163
United States

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