Improving Business Practices and the Boundary of the Entrepreneur: A Randomized Experiment Comparing Training, Consulting, Insourcing and Outsourcing

Stephen J. Anderson and David McKenzie

No 9502, Policy Research Working Paper Series from The World Bank

Abstract: Many small firms lack the finance and marketing skills needed for firm growth. The standard approach in many business support programs is to attempt to train the entrepreneur to develop these skills, through classroom-based training or personalized consulting. However, rather than requiring the entrepreneur to be a jack-of-all-trades, an alternative is to move beyond the boundary of the entrepreneur and link firms to these skills in a marketplace through insourcing workers with functional expertise or outsourcing tasks to professional specialists. A randomized experiment in Nigeria tests the relative effectiveness of these four different approaches to improving business practices. Insourcing and outsourcing both dominate business training; and do at least as well as business consulting at one-half of the cost. Moving beyond the entrepreneurial boundary enables firms to use higher quality digital marketing practices, innovate more, and achieve greater sales and profits growth over a two-year horizon.

Keywords: Financial Sector Policy; ICT Applications; Information Technology; Financial Sector and Social Assistance (search for similar items in EconPapers)
Date: 2020-12-17
New Economics Papers: this item is included in nep-bec, nep-ent, nep-exp, nep-ict, nep-knm and nep-sbm
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Citations: View citations in EconPapers (3)

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Journal Article: Improving Business Practices and the Boundary of the Entrepreneur: A Randomized Experiment Comparing Training, Consulting, Insourcing, and Outsourcing (2022)
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