Banco de México
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Ciudad de México, Distrito Federal
NBER Working Papers and Publications
|December 2013||Business Literacy and Development: Evidence from a Randomized Controlled Trial in Rural Mexico|
with Jesse M. Cunha, Giacomo De Giorgi: w19740
A large share of the poor in developing countries run small enterprises, often earning low incomes. This paper explores whether the poor performance of businesses can be explained by a lack of basic business skills. We randomized the offer of a free, 48-hour business skills course to female entrepreneurs in rural Mexico. We find that those assigned to treatment earn higher profits, have larger revenues, serve a greater number of clients, are more likely to use formal accounting techniques, and more likely to be registered with the government. Indirect treatment effects on those entrepreneurs randomized out of the program, yet living in treatment villages, are economically meaningful, yet imprecisely measured. We present a simple model of experience and learning that helps interpret our ...