Social Skills Improve Business Performance: Evidence from a Randomized Control Trial with Entrepreneurs in Togo

Stefan Dimitriadis () and Rembrand Koning ()
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Stefan Dimitriadis: Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada
Rembrand Koning: Harvard Business School, Harvard University, Boston, Massachusetts 02163

Management Science, 2022, vol. 68, issue 12, 8635-8657

Abstract: Recent field experiments demonstrate that advice, mentorship, and feedback from randomly assigned peers improve entrepreneurial performance. These results raise a natural question: what is preventing entrepreneurs and managers from forming these peer connections themselves? We argue that entrepreneurs may be under-networked because they lack the necessary social skills—the ability to communicate effectively and interact collaboratively with new acquaintances—that allow them to match efficiently with knowledgeable peers. We use a field experiment in the context of a business training program in Togo to test if a short social skills training module increases the number and complementarity of peers that participants choose to learn from. We find that social skills training led entrepreneurs to match with 50% more peers and that more of those matches were based on complementary managerial skill. Finally, the training also increased entrepreneurs’ monthly profits by approximately 20%. Further analyses point to improvements in networking and advice as the drivers of performance improvements. Our findings suggest that social skills help entrepreneurs build relationships that create value for both themselves and their peers.

Keywords: social skills; business performance; entrepreneurs; peer relationships; field experiment (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (7)

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