What Are We Learning from Business Training and Entrepreneurship Evaluations around the Developing World?

Abstract

Business training programs are a popular
 policy option to try to improve the performance of
 enterprises around the world. The last few years have seen
 rapid growth in the number of evaluations of these programs
 in developing countries. This paper undertakes a critical
 review of these studies with the goal of synthesizing the
 emerging lessons and understanding the limitations of the
 existing research and the areas in which more work is
 needed. It finds that there is substantial heterogeneity in
 the length, content, and types of firms participating in the
 training programs evaluated. Many evaluations suffer from
 low statistical power, measure impacts only within a year of
 training, and experience problems with survey attrition and
 measurement of firm profits and revenues. Over these short
 time horizons, there are relatively modest impacts of
 training on survivorship of existing firms, but stronger
 evidence that training programs help prospective owners
 launch new businesses more quickly. Most studies find that
 existing firm owners implement some of the practices taught
 in training, but the magnitudes of these improvements in
 practices are often relatively modest. Few studies find
 significant impacts on profits or sales, although a couple
 of the studies with more statistical power have done so.
 Some studies have also found benefits to microfinance
 organizations of offering training. To date there is little
 evidence to help guide policymakers as to whether any
 impacts found come from trained firms competing away sales
 from other businesses versus through productivity
 improvements, and little evidence to guide the development
 of the provision of training at market prices. The paper
 concludes by summarizing some directions and key questions
 for future studies.