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

TLDR

Business training programs are widely used to boost enterprise performance, yet many impact evaluations are limited by small samples, short follow‑ups, attrition, and measurement problems, leaving policymakers uncertain about the true mechanisms of any observed effects. The paper outlines future research directions and key questions for studying business training impacts. Evaluations show only modest gains in firm survival, limited profit or sales improvements, but stronger evidence that training accelerates new business creation and leads to modest practice adoption.

Abstract

Business training programs are a popular policy option to improve the performance of enterprises around the world, and the number of rigorous impact evaluations of these programs is growing. A critical review reveals that many evaluations suffer from small sample sizes, measure impacts only within a year of training, and experience problems with survey attrition and measurement that limit the conclusions one can draw. Over these short time horizons, there are relatively modest effects of training on the survivorship of existing firms. However, there is 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 the improvement to practices is often modest. Few studies find significant impacts on profits or sales, although some studies with greater statistical power have done so. There is little evidence to guide policymakers regarding whether any identified effects are due to trained firms drawing sales from competing businesses rather than through productivity improvements or to guide the development of the provision of training at market prices. We conclude by summarizing some directions and key questions for future studies.