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Field
Abstract
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Before
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.
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After
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.
Post-script: long-term follow-up surveys conducted in 2021 measure impacts 7 years later on the primary outcomes of profits, sales and profits, as well as examining heterogeneity in these impacts by gender.
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