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The Catch-22 of External Validity in the Context of Constraints to Firm Growth

Author

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  • Greg Fischer
  • Dean Karlan

Abstract

We document the presence of multiple and varied constraints to small and medium firm growth. This presents both a practical problem for business training programs and a challenge to academic economists trying to identify mechanisms though which these programs may affect outcomes. External validity needs theory. This pushes researchers to narrowly defined and highly selected sample frames, which limits the potential for clear, generalizable policy prescriptions. Ultimately, larger samples, multi-arm evaluations, process documentation, and narrowly-focused, theory-supported empirical work are all needed, but the complexity of the problem limits what we learn from any single study.

Suggested Citation

  • Greg Fischer & Dean Karlan, 2015. "The Catch-22 of External Validity in the Context of Constraints to Firm Growth," NBER Working Papers 20971, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:20971
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    References listed on IDEAS

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    1. Angus Deaton, 2010. "Instruments, Randomization, and Learning about Development," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 424-455, June.
    2. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 551-575.
    3. David McKenzie & Christopher Woodruff, 2014. "What Are We Learning from Business Training and Entrepreneurship Evaluations around the Developing World?," The World Bank Research Observer, World Bank, vol. 29(1), pages 48-82.
    4. Miriam Bruhn & Dean Karlan & Antoinette Schoar, 2010. "What Capital Is Missing in Developing Countries?," American Economic Review, American Economic Association, vol. 100(2), pages 629-633, May.
    5. repec:pri:rpdevs:deaton_instruments_randomization_learning_all_04april_2010 is not listed on IDEAS
    6. repec:oup:qjecon:v:128:y:2012:i:1:p:1-51 is not listed on IDEAS
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    Cited by:

    1. Ubfal, Diego & Arráiz, Irani & Beuermann, Diether W. & Frese, Michael & Maffioli, Alessandro & Verch, Daniel, 2022. "The impact of soft-skills training for entrepreneurs in Jamaica," World Development, Elsevier, vol. 152(C).
    2. Alex Coad & Clemens Domnick & Florian Flachenecker & Peter Harasztosi & Mario Lorenzo Janiri & Rozalia Pal & Mercedes Teruel, 2022. "Capacity constraints as a trigger for high growth," Small Business Economics, Springer, vol. 59(3), pages 893-923, October.
    3. Helke Seitz, 2020. "Subgroup Analysis of Investment Constraints: Evidence from Ugandan Microenterprises," Discussion Papers of DIW Berlin 1920, DIW Berlin, German Institute for Economic Research.
    4. Coad, Alexander & Domnick, Clemens & Flachenecker, Florian & Harasztosi, Peter & Janiri, Mario Lorenzo & Pál, Rozália & Teruel Carrizosa, Mercedes, 2021. "Do capacity constraints trigger high growth for enterprises?," EIB Working Papers 2021/08, European Investment Bank (EIB).
    5. Robert T. Jensen & Nolan H. Miller, 2018. "Market Integration, Demand and the Growth of Firms: Evidence from a Natural Experiment in India," Working Papers id:12824, eSocialSciences.
    6. Modeste Dayé & Romain Houssa & Paul Reding, 2015. "Policy instruments to improve MSMEs access to external financing in developing countries: A survey," BeFinD Working Papers 0106, University of Namur, Department of Economics.
    7. Magda Hassan & Jaideep Prabhu & Rajesh Chandy & Om Narasimhan, 2023. "When Bulldozers Loom: Informal Property Rights and Marketing Practice Innovation Among Emerging Market Microentrepreneurs," Marketing Science, INFORMS, vol. 42(1), pages 137-165, January.
    8. repec:nam:befdwp:6 is not listed on IDEAS

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    More about this item

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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