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Stimulating managerial capital in emerging markets : the impact of business and financial literacy for young entrepreneurs

Author

Listed:
  • Bruhn, Miriam
  • Zia, Bilal

Abstract

Identifying the determinants of entrepreneurship is an important research and policy goal, especially in emerging market economies where lack of capital and supporting infrastructure often imposes stringent constraints on business growth. This paper studies the impact of a comprehensive business and financial literacy program on firm outcomes of young entrepreneurs in an emerging post-conflict economy, Bosnia and Herzegovina. The authors conduct a randomized control trial and find that while the training program did not influence business survival, it significantly improved business practices, investments, and loan terms for surviving businesses. Entrepreneurs with higher ex-ante financial literacy further exhibited some improvements in business performance and sales.

Suggested Citation

  • Bruhn, Miriam & Zia, Bilal, 2011. "Stimulating managerial capital in emerging markets : the impact of business and financial literacy for young entrepreneurs," Policy Research Working Paper Series 5642, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5642
    as

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    References listed on IDEAS

    as
    1. Klapper, Leora & Lusardi, Annamaria & Panos, Georgios A., 2012. "Financial literacy and the financial crisis," Policy Research Working Paper Series 5980, The World Bank.
    2. Shawn Cole & Thomas Sampson & Bilal Zia, 2011. "Prices or Knowledge? What Drives Demand for Financial Services in Emerging Markets?," Journal of Finance, American Finance Association, vol. 66(6), pages 1933-1967, December.
    3. repec:pse:psecon:2010-29 is not listed on IDEAS
    4. Miriam Bruhn & David McKenzie, 2009. "In Pursuit of Balance: Randomization in Practice in Development Field Experiments," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 200-232, October.
    5. Miriam Bruhn & Dean Karlan & Antoinette Schoar, 2010. "What Capital Is Missing in Developing Countries?," American Economic Review, American Economic Association, vol. 100(2), pages 629-633, May.
    6. repec:dau:papers:123456789/5380 is not listed on IDEAS
    7. Matteo Bobba, 2013. "Liquidity, Risk, and Occupational Choices," Review of Economic Studies, Oxford University Press, vol. 80(2), pages 491-511.
    8. Bruhn, Miriam & Love, Inessa, 2009. "The economic impact of banking the unbanked : evidence from Mexico," Policy Research Working Paper Series 4981, The World Bank.
    9. Paul J. Gertler & Sebastian W. Martinez & Marta Rubio-Codina, 2012. "Investing Cash Transfers to Raise Long-Term Living Standards," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 164-192, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Financial Literacy; Access to Finance; Business in Development; Competitiveness and Competition Policy; Business Environment;
    All these keywords.

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