Long Term Impacts of One Off Grants to Microenterprises

Traditional economic models of investment such as the Ramsey model would predict that such grants should have at most temporary effects. In such models, there is an efficient steady state size for a business conditional on the ability of the owner....

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Main Authors:	Mel, Suresh de, McKenzie, David, Woodruff, Christopher
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCESS TO CAPITAL ACTION PLAN BANK POLICY BUSINESSES EQUIPMENT FIRMS INVENTORIES LABOR MARKET MICROENTERPRISE MICROENTERPRISES MICROFINANCE MICROFINANCE ORGANIZATIONS PROFITABILITY RESULTS RETURNS
Online Access:	http://documents.worldbank.org/curated/en/2012/02/16240747/long-term-impacts-one-off-grants-microenterprises http://hdl.handle.net/10986/10060

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spelling	okr-10986-100602021-04-23T14:02:48Z Long Term Impacts of One Off Grants to Microenterprises Mel, Suresh de McKenzie, David Woodruff, Christopher ACCESS TO CAPITAL ACTION PLAN BANK POLICY BUSINESSES EQUIPMENT FIRMS INVENTORIES LABOR MARKET MICROENTERPRISE MICROENTERPRISES MICROFINANCE MICROFINANCE ORGANIZATIONS PROFITABILITY RESULTS RETURNS Traditional economic models of investment such as the Ramsey model would predict that such grants should have at most temporary effects. In such models, there is an efficient steady state size for a business conditional on the ability of the owner. A positive shock to capital in such a model will have only temporary effects, speeding up convergence to this steady state, but those firms that did not receive the grants should be able to catch up over time by taking advantage of the high returns to capital and reinvesting in their business. The results highlight that a one-off grant can have a lasting impact on some types of microenterprises. This has implications both for charitable giving, and for policymakers deciding which types of microenterprises to target for assistance. 2012-08-13T10:18:10Z 2012-08-13T10:18:10Z 2012-02 http://documents.worldbank.org/curated/en/2012/02/16240747/long-term-impacts-one-off-grants-microenterprises http://hdl.handle.net/10986/10060 English Finance and PSD Impact; No. 16 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCESS TO CAPITAL ACTION PLAN BANK POLICY BUSINESSES EQUIPMENT FIRMS INVENTORIES LABOR MARKET MICROENTERPRISE MICROENTERPRISES MICROFINANCE MICROFINANCE ORGANIZATIONS PROFITABILITY RESULTS RETURNS
spellingShingle	ACCESS TO CAPITAL ACTION PLAN BANK POLICY BUSINESSES EQUIPMENT FIRMS INVENTORIES LABOR MARKET MICROENTERPRISE MICROENTERPRISES MICROFINANCE MICROFINANCE ORGANIZATIONS PROFITABILITY RESULTS RETURNS Mel, Suresh de McKenzie, David Woodruff, Christopher Long Term Impacts of One Off Grants to Microenterprises
relation	Finance and PSD Impact; No. 16
description	Traditional economic models of investment such as the Ramsey model would predict that such grants should have at most temporary effects. In such models, there is an efficient steady state size for a business conditional on the ability of the owner. A positive shock to capital in such a model will have only temporary effects, speeding up convergence to this steady state, but those firms that did not receive the grants should be able to catch up over time by taking advantage of the high returns to capital and reinvesting in their business. The results highlight that a one-off grant can have a lasting impact on some types of microenterprises. This has implications both for charitable giving, and for policymakers deciding which types of microenterprises to target for assistance.
format	Publications & Research :: Brief
author	Mel, Suresh de McKenzie, David Woodruff, Christopher
author_facet	Mel, Suresh de McKenzie, David Woodruff, Christopher
author_sort	Mel, Suresh de
title	Long Term Impacts of One Off Grants to Microenterprises
title_short	Long Term Impacts of One Off Grants to Microenterprises
title_full	Long Term Impacts of One Off Grants to Microenterprises
title_fullStr	Long Term Impacts of One Off Grants to Microenterprises
title_full_unstemmed	Long Term Impacts of One Off Grants to Microenterprises
title_sort	long term impacts of one off grants to microenterprises
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2012/02/16240747/long-term-impacts-one-off-grants-microenterprises http://hdl.handle.net/10986/10060
_version_	1764411677146611712

Long Term Impacts of One Off Grants to Microenterprises

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