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Business Literacy and Development: Evidence from a Randomized Controlled Trial in Rural Mexico

Author

Listed:
  • Gabriela Calderon
  • Jesse M. Cunha
  • Giacomo De Giorgi

Abstract

The poor in developing countries often run small enterprises, typically with low earnings, although lacking basic business skills. We offer a business skills course to female entrepreneurs in rural Mexico. We find that those randomly assigned to treatment have larger profits and revenues, serve a greater number of clients, and are more likely to use formal accounting techniques. These effects persist in the medium run. We present a simple model to interpret our results: we find that low-quality entrepreneurs appear slightly more likely to quit their business posttreatment and that the positive impacts of the treatment are increasing entrepreneurial quality.

Suggested Citation

  • Gabriela Calderon & Jesse M. Cunha & Giacomo De Giorgi, 2020. "Business Literacy and Development: Evidence from a Randomized Controlled Trial in Rural Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 68(2), pages 507-540.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/701213
    DOI: 10.1086/701213
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    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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