Business Training and Mentoring: Experimental Evidence from Women-Owned Microenterprises in Ethiopia

Very excited to share results from our recent publication in Economic Development and Cultural Change (University of Chicago Press), titled “Business Training and Mentoring: Experimental Evidence from Women-Owned Microenterprises in Ethiopia.” Adding the abstract below:

“Recent research shows that microenterprises in developing countries are constrained by their managerial capacity, especially in the areas of marketing, record keeping, financial planning, and stock control. In a stratified randomized controlled trial, experienced businesswomen in Ethiopia were given a formal business training that addressed these constraints. A second-stage mentoring component in which a random selection of female mentees within the social and business network of the trainees from the first-stage business training received customized mentoring from these “trained mentors.” Pooled results using three rounds of post-training surveys carried out over three years show that business training causes profit and sales to improve by 0.21 standard deviation, while business practices improve by 0.13 standard deviation. The overall impact of mentoring is muted—strong impacts are observed on the adoption of business practices among mentees, but there is no statistically significant impact on profits.”

Working on this paper was a hugely rewarding experience. I received close guidance from the great Markus Goldstein (Director of the Africa Gender Innovation Lab at the World Bank), who and his group are doing cutting-edge empirical research on women’s empowerment in Africa.

About the study – it highlights the potential positive effects of a well-targeted and well-implemented business training program. One novel aspect of the study is the evaluation of a mentoring intervention, where trained mentors were encouraged to teach their mentees what they had learned in the training program. While we don’t see a statistically significant impact of the mentoring component, we show some neat (I think!) evidence on how the improvement in the business performance of the mentees is in line with what their higher adoption of business practices would predict – suggesting that business practices (such as record-keeping, marketing, financial planning, etc.) indeed matter for profits. I believe that some of our results indicate promising possibilities of a well-designed (and incentivized!) mentoring programs.

The ungated/free manuscript is available in my personal website.

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