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Teaching personal initiative beats traditional training in boosting small business in West Africa (English)

Standard business training programs aim to boost the incomes of the millions of self-employed business owners in developing countries by teaching basic financial and marketing practices, yet the impacts of such programs are mixed. We test whether a psychology-based personal initiative training approach which teaches and promotes a proactive mindset that focuses on entrepreneurial behaviors can have more success. A randomized controlled trial in Togo assigned microenterprise owners to a control group (N=500); a leading business training program (N=500); or to personal initiative training (N=500). Four follow-up surveys track firm outcomes over two years and show personal initiative training increases firm profits by 30 percent, compared to a statistically insignificant 11 percent for traditional training. The training is cost-effective, paying for itself within one year.

Details

  • Author

    Campos,Francisco Moraes Leitao, Frese,Michael Dr., Goldstein,Markus P., Iacovone,Leonardo, Johnson,Hillary C., Mckenzie,David J., Mensmann, Mona

  • Document Date

    2017/09/01

  • Document Type

    Working Paper

  • Report Number

    119938

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Africa,

  • Region

    Africa,

  • Disclosure Date

    2017/09/22

  • Disclosure Status

    Disclosed

  • Doc Name

    Teaching personal initiative beats traditional training in boosting small business in West Africa

  • Keywords

    trade and competitiveness; traditional training; traditional business; small and medium enterprise; business training program; business practice; access to finance; small business owner; short training course; continuity and change; human resource management; human resource practice; diversification of products; return on investment; small business training; small business administration; randomized controlled trials; constraints to entrepreneurship; good business practice; impacts on business; aggregate index; entrepreneurial success; monthly profit; treatment group; baseline survey; take-up rate; firm level; standard deviation; standard error; treatment effect; firm owner; labor input; confidence interval; microfinance client; software firms; action planning; negative value; Exchange Rates; sample selection; firm growth; microfinance organization; Economic Studies; non-governmental organization; economic study; research policy; market practice; short term consultant; currency conversion; life course; entrepreneurial behavior; applied psychology; innovation capability; computer software; management science; sample period; freedom from; public affair; stock control; female enterprise; financial capital; project finance; field experiment; standard economic; behavioral economics; standard accounting; alternative measure; methodological issue; paid worker; innovation activity; business improvement; anonymous reviewer; research assistance; administration support; small-scale entrepreneurship; outcome measure; classroom instruction; attrition rates; estimation methodology; entry regulation; pooled estimate; firm survival; average age; registered company; point estimate; operations management; information seeking; product offerings

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Citation

Campos,Francisco Moraes Leitao Frese,Michael Dr. Goldstein,Markus P. Iacovone,Leonardo Johnson,Hillary C. Mckenzie,David J. Mensmann, Mona

Teaching personal initiative beats traditional training in boosting small business in West Africa (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/865931506094667006/Teaching-personal-initiative-beats-traditional-training-in-boosting-small-business-in-West-Africa