Can Government Intervention Make Firms More Investment-Ready? : A Randomized Experiment in the Western Balkans
Many innovative start-ups and small and medium-size enterprises have good ideas, but do not have these ideas fine-tuned to the stage where they can attract outside funding. Investment readiness programs attempt to help firms to become ready to attr...
| Main Authors: | , , |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/453261533567046459/Can-government-intervention-make-firms-more-investment-ready-a-randomized-experiment-in-the-Western-Balkans http://hdl.handle.net/10986/30231 |
| Summary: | Many innovative start-ups and small and
medium-size enterprises have good ideas, but do not have
these ideas fine-tuned to the stage where they can attract
outside funding. Investment readiness programs attempt to
help firms to become ready to attract and accept outside
equity funding through a combination of training, mentoring,
master classes, and networking. This study conducted a
five-country randomized experiment in the Western Balkans
that worked with 346 firms and delivered an investment
readiness program to half of the firms, with the control
group receiving an inexpensive online program instead. A
pitch event was then held for these firms to pitch their
ideas to independent judges. The investment readiness
program resulted in a 0.3 standard deviation increase in the
investment readiness score, with this increase occurring
throughout the distribution. Two follow-up surveys show that
the judges' scores predicted investment readiness and
investment outcomes over the subsequent two years. Treated
firms attained significantly more media attention and were 5
percentage points more likely to have made a deal with an
outside investor, although this increase is not
statistically significant (95 confidence interval of -4.7 to
+14.7 percentage points). |
|---|