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

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Science  22 Sep 2017:
Vol. 357, Issue 6357, pp. 1287-1290
DOI: 10.1126/science.aan5329
  • Fig. 1 Quantile treatment effects on monthly profits show greater gains from personal initiative training across the distribution.

    Plotted are estimates from quantile regression of the inverse hyperbolic sine transformation of profits, which behaves like the logarithmic transformation but allows for zeroes and negative values. The regression pools data across all four rounds of follow-up surveys, controlling for survey round effects and baseline profits. The difference between the two training programs is statistically significant at the 10% level or lower for all percentiles shown, except for the 15th (P = 0.13) and the 70th (P = 0.20). The P values for testing equality of these effects are shown in fig. S2.

  • Table 1 Impact of training programs on business survival, profitability, and sales.

    Data are from four rounds of surveys and show the average impacts over the 2.5 years after training. All regressions include randomization strata and survey wave dummies. Huber-White robust standard errors (in parentheses) are clustered at the firm level. Business survival is a binary indicator that takes the value 1 if the business survives. Sales are winsorized (capped) at the 99th percentile and profits at the 1st and 99th percentiles, reducing the influence of outliers. Sales and profits are expressed in terms of real CFA francs. The profits and sales index is the mean of the standardized z-scores of our various profits and sales measures. An F test was used to test equality of the impacts of the two training programs. *P < 0.1; **P < 0.05; ***P < 0.01.

    Business
    survival
    Monthly
    sales
    Monthly
    profits
    Weekly
    profits
    Profits and
    sales index
    Traditional business training
    –0.005
    (0.008)
    38,077
    (57,812)
    10,746
    (6802)
    3086
    (2050)
    0.029
    (0.030)
    Personal initiative training
    –0.003
    (0.008)
    114,733*
    (58,619)
    28,709***
    (7110)
    6685***
    (1979)
    0.100***
    (0.031)
    Number of observations57925642564256335643
    Number of firms14991492149214921492
    P value from test of equality of treatments 0.8130.1710.0140.0910.025
    Control group mean0.960680,80796,08930,4170.000
  • Table 2 Mechanisms through which training operates.

    Huber-White robust standard errors (in parentheses) are clustered at the firm level. *P < 0.1; **P < 0.05; ***P < 0.01.

    Business
    practices
    Personal
    initiative
    Capital and
    labor inputs
    Innovation
    index
    Diversified
    product line
    Access to
    finance index
    Traditional business training0.060*** (0.008)0.065*** (0.015)0.032* (0.020)0.117*** (0.050)0.044** (0.018)0.070** (0.033)
    Personal initiative training0.054*** (0.007)0.124*** (0.015)0.078*** (0.020)0.309*** (0.070)0.092*** (0.018)0.147*** (0.040)
    Number of observations564655385655563956324207
    Number of firms149214841492149214921473
    P value from test of equality of treatments0.4580.0000.0240.0110.0100.043
    Control group mean0.6184.320.0000.0000.3350.000

Supplementary Materials

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

    Francisco Campos, Michael Frese, Markus Goldstein, Leonardo Iacovone, Hillary C. Johnson, David McKenzie, Mona Mensmann

    Materials/Methods, Supplementary Text, Tables, Figures, and/or References

    Download Supplement
    • Materials and Methods
    • Supplementary Text
    • Figs. S1 and S2
    • Tables S1 to S16
    • References

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