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Capacity building as a route to export market expansion: A six-country experiment in the Western Balkans

Author

Listed:
  • Cusolito, Ana
  • Darova, Ornella
  • McKenzie, David

Abstract

The limited market size of many small emerging economies is a key constraint to the growth of innovative small and medium enterprises. Exporting offers a potential solution, but firms may struggle to locate and appeal to foreign buyers. We conducted a six-country randomized experiment with 225 firms in the Western Balkans to test the effectiveness of 30 hours of live group-based training and 5 hours of one-on-one remote consulting in overcoming these constraints. Treated firms used techniques such as search engine optimization and improved Facebook content to increase their digital presence and better reach foreign customers. A year later, we find positive and significant impacts on the number of customers, and a significant intensive margin increase in export sales. Qualitative interviews suggest this improvement came from a combination of sector-specific advice on market expansion, and through an encouragement effect which gave entrepreneurs the confidence to try new sales strategies.

Suggested Citation

  • Cusolito, Ana & Darova, Ornella & McKenzie, David, 2023. "Capacity building as a route to export market expansion: A six-country experiment in the Western Balkans," CEPR Discussion Papers 17789, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17789
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    Cited by:

    1. is not listed on IDEAS
    2. repec:osf:osfxxx:hdjpk_v1 is not listed on IDEAS
    3. Tristan Reed, 2024. "Export-Led Industrial Policy for Developing Countries : Is There a Way to Pick Winners?," Policy Research Working Paper Series 10902, The World Bank.
    4. Davies, Elwyn & Deffebach, Peter & Iacovone, Leonardo & McKenzie, David, 2024. "Training microentrepreneurs over Zoom: Experimental evidence from Mexico," Journal of Development Economics, Elsevier, vol. 167(C).
    5. Ali, Nadia & Cali, Massimiliano & Rijkers, Bob, 2025. "Promoting Innovative Startups: Quasi-Experimental Evidence from Tunisia," Journal of Development Economics, Elsevier, vol. 177(C).
    6. Janzen, Sarah & Magnan, Nicholas & Mullally, Conner & Sharma, Shruti & Shrestha, Bhola, 2025. "Going the distance: Hybrid vocational training for women in Nepal," Journal of Development Economics, Elsevier, vol. 174(C).

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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