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

Abstract

This paper studies the impact of a course in "Finance" for top managers of medium and large enterprises in Mozambique through a randomized controlled trial (RCT). Survey data and accounting data provide consistent evidence that managers change firm financial policies in response to finance education. The largest treatment ef- fect is on short-term financial policies related to working capital. Reductions in accounts receivable and inventories generate an increase in cash flows used to finance long-term investments. Those policy changes also improve the performance of the treated firms. Overall, our results suggest that relatively small and low-cost interventions, such as a standard executive education program in finance, can help firms to mitigate financial constraints and potentially affect economic development.

Keywords: CEOs, Financial Education, financial literacy, Financing constraints, RCT

JEL Classification: D4, G30, J24, L25, M41, O16