Do Capital Grants Improve Microenterprise Productivity?

Laurin James, Michael Koelle and Simon Quinn

No 2019-13, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: Can large capital injections increase the productivity of microenterprises? We use the lens of a production function to re-examine two previous randomised controlled trials that allocated capital grants to microenterprises. We find that productivity is higher for treated firms, and accounts for 16–34 percent of the revenue effects of capital grants. We find that treatment tilts the asset composition towards durables with a technology component: a result consistent with an important role for capital- embodied technology. These productivity effects are still present six years after the grants, suggesting that the intervention has put microenterprises on a different tra- jectory.

Keywords: Economic; development; Microenterprises; Formality; and; informality; embodied; technology; Total; factor; productivity (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:csa:wpaper:2019-13

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