Startups in developing countries tend to grow more slowly on average than those in high-income countries, but the reasons why are not well understood. Researchers analyzed data on all manufacturers with more than 10 employees in Colombia and the U.S. over a period of 30 years to compare employment growth among manufacturers in each country.
Improving tax administration is an important priority for many developing country governments. An efficient and equitable tax system can increase government revenue, lessen dependence on foreign aid, and strengthen state authority. Researchers studied the impact of an innovative taxpayer recognition program that appealed to business owners’ desires for social recognition on firms’ VAT tax compliance and payment rates in Dhaka, Bangladesh.
In Sub-Saharan Africa, wage job opportunities are limited, and a vast majority of young people are engaged in low-productive work. Many governments support formal apprenticeship programs to help youth find suitable employment, but there is limited evidence on the direct and indirect effects of these public interventions.
Youth unemployment and underemployment are pressing policy challenges in Sub-Saharan Africa and job-training programs have not proven to be effective (or cost-effective) at improving youth labor market outcomes. In Ghana, researchers conducted a randomized evaluation to estimate the impact of a government program that placed young people in traditional apprenticeships and matched them with training providers.
Access to electricity can bring significant economic benefits to communities, but in many rural areas extending the electrical grid can be costly, difficult, and unreliable. Decentralized, “off-grid” energy systems such as solar mini-grids may be another effective way to provide energy to communities that do not have access to an electrical grid, but less is known about their impacts, particularly for women.
Expanding credit access to small- and medium-sized agricultural producers is an important policy challenge, given the millions of livelihoods affected along its supply chain. Researchers used data on loans to coffee processors across 24 developing countries to study credit and insurance constraints in the coffee sector and assessed whether relationships between lenders and coffee mills could mitigate strategic default.
The garment industry has expanded women’s employment opportunities in the urban job market in Bangladesh. However, jobs available to women at factories are typically limited to junior positions. This study evaluates the effectiveness of a program that provides female garment workers with skills that lead to promotion to supervisory positions.
Microenterprises such as produce vendors face disadvantages compared to larger firms in sourcing inventory because they must travel frequently to restock and pay higher costs when doing so. Researchers evaluated Agruppa, a mobile phone-based technology service, which creates virtual buyer groups to buy more cheaply in bulk. The evaluation found that initial demand for the service was high, saving business owners time and expense, and increasing profits on certain staple goods.
Renewable off-grid home lighting systems have the potential to reduce the use of kerosene lanterns and other expensive and dirty forms of light in areas that lack electricity, but adoption of such lighting systems is low.
Few microenterprises grow and employ more than one worker, and policymakers have struggled to identify what keeps these businesses from growing further. To study these limitations, researchers offered microentrepreneurs capital to incentivize them to hire. Results showed that a wage subsidy did not lead to lasting increases in employment sales or profits.
Prior evidence on small grants programs to female-owned businesses has found that women entrepreneurs are less likely to invest this capital into their businesses than men are. The intersection between household and business needs seems to play a role in this.
While workers in larger firms tend to be more productive than those in smaller ones, the underlying reasons for these differences are unclear. In India, researchers are conducting a randomized evaluation among data entry employees, to measure the impact of different work arrangements (office- versus home-based) on worker productivity.
Business training programs aim to instill standardized management practices in participants in hopes that these will help raise business performance. However, decision makers and researchers have struggled to find conclusive evidence on the firm-level impacts of these trainings.
What makes someone a successful entrepreneur? Is it a matter of teaching the right business skills, or instilling a proactive entrepreneurial mindset? If the latter, can these personal qualities be taught? This research in Togo investigated these questions, and found that a training focused on personal initiative skills, such as self-starting, future-oriented, and persistent behavior, was more successful than a traditional business training at increasing sales and profits.
Do low levels of trust limit the spread of ideas and knowledge among small-scale firms in African cities? A new study provides micro-level descriptive evidence on the spatial patterns of economic activity among small business owners in one of the fastest-developing cities in southern Africa: Lusaka, Zambia. Innovations for Poverty Action worked with researchers to collect new survey data to investigate the relation between knowledge sharing, trust, and business agglomeration within the city.