Business Training and Female Enterprise Start-up, Growth, and Dynamics: Experimental Evidence from Sri Lanka

De Mel, McKenzie and Woodruff (2014) conduct a randomized experiment among women in urban Sri Lanka to measure the impact of the most commonly used business training course in developing countries, the Start-and-Improve Your Business (SIYB) program. They study two groups of women: a random sample operating subsistence enterprises and a random sample out of the labor force but interested in starting a business. They track impacts of two treatments – training only and training plus a cash grant – over two years. For women in business, training changes business practices but has no impact on business profits, sales or capital stock. The grant plus training combination increases business profitability in the first eight months, but this impact dissipates in the second year. Among potential startups, business training hastens entry – without changing longer-term ownership rates – and increases profitability. The researchers conclude that training may be more effective for new owners.

Authors

Suresh De Mel

University of Peradeniya

David McKenzie

World Bank Group

Chris Woodruff

University of Oxford and Centre for Economic Policy Research (CEPR)