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Selection or More Capital ? Experimental Evidence on High-Growth Entrepreneurs in Kenya

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Listed:
  • Campos, Francisco
  • Safir, Abla
  • Koffka, Celine
  • McKenzie, David
  • Zia, Bilal

Abstract

Business plan competitions aim to identify and spur high-growth entrepreneurs. Two experiments were embedded into in a Kenyan competition to test how intensity of selection and of capital determine entrepreneurial outcomes. Applicants received a US$9,000 grant after a streamlined process or went through multiple selection stages and were randomly assigned US$9,000 or US$36,000. All grants initially generated jobs, but the impacts only persisted over three years under multi-stage selection. The larger grants did not yield greater long-term impacts than the multi-stage US$9,000 grant, suggesting diminishing returns to capital and limited lumpy investment opportunities. Selection, rather than grant size, determines long-run firm growth.

Suggested Citation

  • Campos, Francisco & Safir, Abla & Koffka, Celine & McKenzie, David & Zia, Bilal, 2026. "Selection or More Capital ? Experimental Evidence on High-Growth Entrepreneurs in Kenya," Policy Research Working Paper Series 11432, The World Bank.
    • Handle: RePEc:wbk:wbrwps:11432
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