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Pathways to profits : identifying separate channels of small firm growth through business training

Author

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  • Anderson,Stephen J.
  • Chandy,Rajesh
  • Zia,Bilal Husnain

Abstract

This paper identifies separate and unique pathways to profits among small businesses in South Africa that are exposed to marketing or finance training in a randomized control study. The marketing group achieves greater profits by adopting a growth focus on higher sales, greater investments in stock and materials, and hiring more employees. The finance group achieves similar profit gains but through an efficiency focus on lower costs. Both groups show significantly higher adoption of business practices related to their respective training program. Consistent with a growth focus, marketing/sales skills are significantly more beneficial to firm owners who ex ante have less exposure to different business contexts. In contrast and in line with an efficiency focus, entrepreneurs who have been running more established businesses prior to training benefit significantly more from finance/accounting skills.

Suggested Citation

  • Anderson,Stephen J. & Chandy,Rajesh & Zia,Bilal Husnain, 2016. "Pathways to profits : identifying separate channels of small firm growth through business training," Policy Research Working Paper Series 7774, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7774
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    Cited by:

    1. David McKenzie & Susana Puerto, 2021. "Growing Markets through Business Training for Female Entrepreneurs: A Market-Level Randomized Experiment in Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 13(2), pages 297-332, April.
    2. Beber, Bernd & Dworschak, Regina & Lakemann, Tabea & Lay, Jann & Priebe, Jan, 2021. "Skills Development and Training Interventions in Africa: Findings, Challenges, and Opportunities," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 247426.
    3. Reddi Kotha & Balagopal (Bala) Vissa & Yimin Lin & Anne‐Valérie Corboz, 2023. "Do ambitious entrepreneurs benefit more from training?," Strategic Management Journal, Wiley Blackwell, vol. 44(2), pages 549-575, February.

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    Keywords

    Technology Innovation; Technology Industry;

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