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Capacity building as a route to export market expansion: A six-country experiment in the Western Balkans

Ana Cusolito, Ornella Darova and David McKenzie

No 17789, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The limited market size of many small emerging economies is a key constraint to the growth of innovative small and medium enterprises. Exporting offers a potential solution, but firms may struggle to locate and appeal to foreign buyers. We conducted a six-country randomized experiment with 225 firms in the Western Balkans to test the effectiveness of 30 hours of live group-based training and 5 hours of one-on-one remote consulting in overcoming these constraints. Treated firms used techniques such as search engine optimization and improved Facebook content to increase their digital presence and better reach foreign customers. A year later, we find positive and significant impacts on the number of customers, and a significant intensive margin increase in export sales. Qualitative interviews suggest this improvement came from a combination of sector-specific advice on market expansion, and through an encouragement effect which gave entrepreneurs the confidence to try new sales strategies.

JEL-codes: C93 F14 L26 O12 O25 (search for similar items in EconPapers)
Date: 2023-01
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