Mentors or Teachers? Microenterprise Training in Kenya

We use a randomized controlled trial to demonstrate that inexperienced female microenterprise owners in a Kenyan slum benefit from mentorship by an experienced entrepreneur in the same community. Mentorship increases profits by 20 percent on average with initially large effects that fade as matches...

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Bibliographic Details
Published inAmerican economic journal. Applied economics Vol. 10; no. 4; pp. 196 - 221
Main Authors Brooks, Wyatt, Donovan, Kevin, Johnson, Terence R.
Format Journal Article
LanguageEnglish
Published American Economic Association 01.10.2018
Subjects
Business education
Clinical trials
Economic theory
Entrepreneurs
Knowledge
Mentoring
Mentoring programs
Mentors
Missing information
Owners
Profitability
Profits
Slums
Small business
Teachers
Women
Kenya
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Summary:We use a randomized controlled trial to demonstrate that inexperienced female microenterprise owners in a Kenyan slum benefit from mentorship by an experienced entrepreneur in the same community. Mentorship increases profits by 20 percent on average with initially large effects that fade as matches dissolve. We conduct a formal business education intervention, which has no effect on profits despite changes in business practice. Our results demonstrate that missing information is a salient barrier to profitability, but the type of information matters: access to the localized, specific knowledge of mentors increases profit while abstract, general information from the class does not.
ISSN:1945-7782
1945-7790
DOI:10.1257/app.20170042