Business Training Plus for Female Entrepreneurship? Short and Medium-Term Experimental Evidence from Peru

With millions of women around the developing world thrown into self-employment but with low productivity, increasing the profitability of their businesses is highly relevant for poverty reduction and gender equity. This study evaluates the impacts of a BDS programserving female microentrepreneurs in Lima using an experimental design, that included two treatment groups: One received only general training (GT), albeit more time-intense than previous studies, and delivered by experts, while the other received in addition technical assistance (TA). Results show the existence of room for efficiency gains and growth, as all treated showed increased sales revenues and self-reported adoption of recommended business practices. Those that received only GT showed positive but not significant effects early on, but the two treatment groups showed indistinguishable growth, above 15%, two years after the end of the treatment. Low take up of the training may suggest some space to improve recruitment and delivery of treatments

Policy implications

By itself, an intensive training programme delivered by experts can unblock the managerial capacities of micro-entrepreneurs and help them to grow their firms. The training component provides a good return on investment. The cost is compensated for in just three months by the extra sales generated by the training. Given that sales effects converge for those that do and don’t receive the consulting sessions, the extra costs associated with this component don’t prove to be cost-effective, on average. The consulting complement might be particularly fitted for entrepreneurs with higher education and entrepreneurial traits. They are the ones who benefit the most from it in terms of improved business performance.

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Hypotheses/research question

Can training transform a small trader/producer in a microentrepreneur?

Study design

Multiple treatment with stratified randomization

A total of 2400 women filled out the commitment sheets during the two rounds of recruitment, 1200 in each cone. However, only 1979 (83%) of them were interviewed at baseline, as the rest were not found or refused the interview.

Rounds of data collection

Baseline and two follow-up surveys.

Baseline data collection and method

The recruitment was implemented in two rounds. The first round took place in February of 2009 in the northern cone, while the second round took place in September of the same year in the southern cone. 1979 eligible women from 34 zones were recruited and surveyed at baseline.The questionnaire included questions about socio-demographic characteristics of the eligible women and her family, economic activities by all family members, characteristics of the eligible women's businesses as well as business practices and performance.We also asked the women about their business knowledge, attitudes and perceptions aswell as their involvement in key business and family decisions. For the second follow up survey, we went back to a team of 17 surveyors over a 3 month period, although the last month was mostly dedicated to revisit those initially not found.

Data collection method and data collected

Monitoring of the intervention and the experimental design included periodic reports of attendance by selected beneficiaries, progress in the curricula by the different groups, as well as discussions with facilitators about what they perceive to be key changes generated by the intervention. The first follow up survey was conducted about 7–10 months after the end of the general training component. For those in the T2 group, the intervention continued with the TA component for three more months, by helping female microentrepreneurs identify problems with their businesses and implement innovations. The second follow up survey went from October to December of 2011, giving the first cohort 27–30 months since the end of the training component.

Unit of analysis

Microentrepreneurs

Stratification

By age and schooling of the woman, if she had a titled plot, if she received business training previously, if she runs the business and age of the business, and the zone in which her business is located.

Delivery partner

Centro de Servicios para la Capacitación Laboral y el Desarrollo (CAPLAB), Centro Latinoamericano de Trabajo Social (CELATS), and Instituto de Promoción del Desarrollo Solidario (INPET).

Reference

Valdivia, M., 2015. Business training plus for female entrepreneurship? Short and medium-term experimental evidence from Peru. Journal of Development Economics, 113, 33-51.

Business Training Plus for Female Entrepreneurship? Short and Medium-Term Experimental Evidence from Peru

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