Identifying and Spurring High-Growth Entrepreneurship : Experimental Evidence from a Business Plan Competition

Almost all firms in developing countries have fewer than 10 workers, with the modal firm consisting of just the owner. Are there potential high-growth entrepreneurs with the ability to grow their firms beyond this size? And, if so, can public policy help alleviate the constraints that prevent these entrepreneurs from doing so? A large-scale national business plan competition in Nigeria is used to help provide evidence on these two questions. The competition was launched with much fanfare, and attracted almost 24,000 entrants. Random assignment was used to select some of the winners from a pool of semi-finalists, with US$36 million in randomly allocated grant funding providing each winner with an average of almost US$50,000. Surveys tracking applicants over three years show that winning the business plan competition leads to greater firm entry, higher survival of existing businesses, higher profits and sales, and higher employment, including increases of over 20 percentage points in the likelihood of a firm having 10 or more workers. These effects appear to occur largely through the grants enabling firms to purchase more capital and hire more labor.

Bibliographic Details

Main Author:	McKenzie, David
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2015-08
Subjects:	EQUIPMENT, ACCOUNTING, ENTERPRISE DEVELOPMENT, CUSTOMER, INSTALLATION, CERTIFICATE, MATERIALS, SALES, RADIO STATIONS, E-COMMERCE, MEDIUM ENTERPRISES, BUSINESS SCHOOLS, INFORMATION, SELLING, MONITORING, ENTREPRENEURIAL SKILL, BUSINESS NETWORKS, IMPACT ASSESSMENT, MEDIUM ENTERPRISE, CONSULTANTS, IMPACTS, NEW PRODUCTS, DISTRIBUTION, BREAKEVEN ANALYSIS, CASHFLOW, BUDGET CONSTRAINTS, COMPUTER TRAINING, PRICE, OWNERSHIP, VERIFICATION, RETAIL TRADE, PLANNING, TIME PERIOD, ENTREPRENEURIAL SKILLS, QUALITY, PERSONAL INFORMATION, REPORTING, TRAINING COURSE, REGISTRY, COMPUTER, OPEN ACCESS, SATELLITE, TELEVISION, COST EFFECTIVENESS, INSTITUTIONS, DATA, ADVERTISING, TECHNICAL ASSISTANCE, COMMERCE, CONTROL SYSTEMS, ACQUISITION, BUSINESS INNOVATION, IMPACT EVALUATION, LICENSE, LOGISTICS, TARGETS, BUSINESS OWNERSHIP, PRODUCTIVITY, BUSINESS OPERATION, CRITERIA, DIRECT COSTS, MARKETING, MARKETING STRATEGY, PRIVATE SECTOR DEVELOPMENT, BUSINESS INPUTS, INVENTORIES, EMPLOYMENT CREATION, INVENTORY, RADIO, ACCOUNT, BUSINESS ECONOMICS, BUSINESS APPLICATIONS, TELEPHONE, BUSINESS ORGANIZATION, RESOURCES, MANUFACTURING, PHONE, TECHNOLOGY, MARKET SEGMENTATION, TRAINING COURSES, INVENTORY LEVELS, VERTICAL INTEGRATION, BUSINESS PLAN, TIME FRAME, SOFTWARE, CUSTOMER BASE, RESULTS, NETWORKS, COST, PRIVATE SECTOR, BALANCE SHEET, TRANSPARENT WAY, QUALITY CONTROL, MARKETING RESEARCH, RESULT, INNOVATION POLICY, SECURITY, BUSINESSES, BUSINESS IDEAS, BUSINESS, NETWORK, BUSINESS LEADERS, PERFORMANCE, PURCHASING, BUSINESS PLANS, FINANCIAL PLANNING, INNOVATION, INSTITUTION, BUSINESS SECTORS, PROFIT, ACCOUNTS, COMMUNICATION, QUALITY ASSURANCE, NEW TECHNOLOGY, CUSTOMERS, BUSINESS IDEA, COST PER JOB, COMMUNICATION TECHNOLOGY, PROFITS, CUSTOMER DEMAND, BUSINESS RESEARCH, GROWTH POTENTIAL, IMPLEMENTATION, TARGET, USES, CASH FLOW, BUSINESS TRAINING,
Online Access:	http://documents.worldbank.org/curated/en/2015/08/24899889/identifying-spurring-high-growth-entrepreneurship-experimental-evidence-business-plan-competition http://hdl.handle.net/10986/22437
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