Finance & PSD Impact

48 items available

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http://hdl.handle.net/10986/9406

This series on finance and privates sector development (PSD) reports on lessons from DECFP impact evaluations.

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Now showing 1 - 10 of 48

Helping Western Balkan SMEs Expand Exports Through Online Training and Consulting

(Washington, DC: World Bank, 2022-12-01) Cusolito, Ana Paula ; Darova, Ornella ; Mckenzie, David J.

One of the key challenges facing innovative small and medium enterprises is customer acquisition. This is especially a constraint in less populated countries like those in the Western Balkans, where domestic demand can be limited for specialized services and products. Exporting to larger and richer countries provides a potential solution, but expanding into foreign markets involves considerable search frictions, and small firms may lack the skills and confidence to market to foreign buyers. The authors test the effectiveness of a capacity building program that aimed to help firms bounce back from the COVID-19 pandemic and help them expand their markets and export more. The results show that capacity building can help provide the skills and confidence for innovative SMEs to better reach and sell to foreign buyers. They also provide some of the first evidence on offering training virtually to firms in multiple countries at once, which offers promise for the scalability of such efforts.
Missing Information: Why Don’t More Firms Seek Out Business Advice?

(World Bank, Washington, DC, 2022-10) Bruhn, Miriam ; Piza, Caio

Seeking out business advice, for example through classroom training or consulting, can be a profitable investment. Previous research has found that obtaining business advice through classroom training or one-on-one consulting can increase profits and sales, and firms can recover the cost of training in one to three years. Yet, many firms do not take up business training, even when it is heavily subsidized. Anecdotal evidence suggests that one reason for this low take-up is lack of information on business practices and on the benefits of improving these practices. The authors collaborated with the Parana office of the Brazilian Micro and Small Business Support Service (SEBRAE-PR), to test empirically whether providing more information on business practices can lead firms to seek out advice and improve their performance.
Three Interventions to Reduce Irregular Migration and Promote Alternatives: An Experiment in The Gambia

(World Bank, Washington, DC, 2022-09) Bah, Tijan ; Batista, Catia ; Gubert, Flore ; McKenzie, David

Irregular migration from Africa to Europe attracts substantial policy attention. Although international migration can enable people from developing countries to dramatically increase their incomes, the absence of legal channels and the chance of higher incomes can induce people to take part in risky journeys that can involve a low chance of success, and the potential for human rights abuses and loss of life. The most common policy responses have been efforts to deter this form of migration through increased enforcement, and through information campaigns that emphasize the dangers associated with irregular migration. However, evidence on the effectiveness of such campaigns is limited, and such policies may not be enough if they do not offer alternative possibilities for improving livelihoods. We designed an experiment in The Gambia to test different approaches.
Using the Market to Hire Skills as an Alternative to Business Training

(World Bank, Washington, DC, 2020-12) Anderson, Stephen J. ; McKenzie, David

This note reports on a new approach to improving business practices in growing firms - using the market to insource or outsource skills instead of training the entrepreneur.
How Should Business Training be Priced? A Demand Experiment in Jamaica

(World Bank, Washington, DC, 2020-09-28) Maffioli, Alessandro ; McKenzie, David ; Ubfal, Diego

This note examines how sensitive the demand for business training is to price, and whether charging a higher price causes firm owners to exert more effort in training.
Empowering Farmers to Adopt Agricultural Recommendations

(World Bank, Washington, DC, 2020-09) Corral, Carolina ; Gine, Xavier ; Mahajan, Aprajit ; Seira, Enrique

A quick glance at agricultural input use data from developing countries reveals a large dispersion in take up of improved inputs and practices across farms. One explanation is that this is a problem resulting from limited information, credit constraints, risk, poor input quality, and/or behavioral biases. An alternative view is that farmers are in fact making optimal adoption decisions, and differences among farmers instead reflect heterogeneity in a fixed factor such as soil quality. The authors test whether rainfed farmers in Tlaxcala, Mexico adopt tailored recommendations based on soil analyses and whether productivity improves as a result. The authors vary the level of information specificity (whether recommendations are based on the farmer's own plot or on a larger geographical area) because individually tailored information may be more effective but is also more expensive. The authors also vary whether farmers can choose what inputs to purchase by offering an inflexible grant that subsidizes only the recommended inputs or a flexible one that gives farmers the choice of which inputs to purchase.
Does Mobile Money Improve Livelihoods for Households in Poor and Remote Areas?

(World Bank, Washington, DC, 2019-10) Bruhn, Miriam ; Wieser, Christina

The latest impact evaluation note looks at whether mobile money benefits households in poor and remote areas of Northern Uganda and finds large increases in non-farm self-employment and food security.
Shortening Supply Chains for Fruit and Vegetable Vendors in Bogota

(World Bank, Washington, DC, 2019-08) McKenzie, David

The latest note examines the impact of a social enterprise's attempts to shorten the supply chain between farmers and small retail stores in Bogota, an idea that was one of the winners of the SME ideas competition. The small retail stores that are prevalent on many street corners in developing countries face very different supply chains for different products. On one hand, multinational suppliers of branded non-perishable products have amazingly efficient supply chains that result in store-door delivery to even the most remote places. In contrast, the fresh fruit and vegetables they sell are part of what are typically much less efficient supply chains, that often end in centralized wholesale markets, requiring substantial travel time and costs for retail store vendors, and increased food costs for the urban poor. This is the case in Bogota, where the typical store owner gets up at 4:30am each morning, and spends an average of 2 hours travelling to, around, and back from the central market of Corabastos in order to buy fruits and vegetables.
Improving Management in Colombian Firms Through Individual and Group Consulting

(World Bank, Washington, DC, 2019-06) Iacovone, Leonardo ; Maloney, William ; McKenzie, David

The latest note tests two different approaches to improving management, and finds a novel group-based approach to be more cost-effective than the standard approach of providing consulting to individual firms.
Helping Firms Realize the Benefits of (Partial) Formalization

(World Bank, Washington, DC, 2018-10) Campos, Francisco ; Goldstein, Markus ; McKenzie, David

Developing country governments seek to reduce pervasive informality of firms for multiple reasons: increasing the tax base, helping firms access formal markets and grow, increasing rule of law, and as a means of obtaining data that can be used for other government functions. The most common approach towards achieving these aims has been to make it easier for firms to formalize, most notably by setting up one-stop shops where firms can register as a legal entity and for tax purposes all at once. But past experiments have showed very few informal firms choose to formalize even after such reforms, and that many of those who do fail to see any benefits on financial access or firm growth. An alternative approach, used in much of Africa, is to separate the process of business registration from tax registration. Getting firms to register legally may help governments reduce informality and achieve some of the aims above, even if it does not raise more taxes. But the question is then whether firms are interested in even this more limited form of formalization, and whether they see any benefits from using it.