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The catch-22 of external validity in the context of constraints to firm growth

Author

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  • Fischer, Gregory
  • Karlan, Dean

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

  • Fischer, Gregory & Karlan, Dean, 2015. "The catch-22 of external validity in the context of constraints to firm growth," LSE Research Online Documents on Economics 66033, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:66033
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    File URL: https://researchonline.lse.ac.uk/id/eprint/66033/
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    Cited by:

    1. 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).
    2. 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.
    3. 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.
    4. 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).
    5. 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.
    6. 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.
    7. 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.
    8. repec:nam:befdwp:6 is not listed on IDEAS

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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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