Using Experimental Evidence to Inform Firm Support Programs in Developing Countries
Countries design programs for supporting firms, with varying levels of success. Firm growth is constrained by several factors, such as low firm capabilities (e.g. management), availability of finance, and access to markets. Based on the available e...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/949101603887223673/Using-Experimental-Evidence-to-Inform-Firm-Support-Programs-in-Developing-Countries http://hdl.handle.net/10986/34694 |
| Summary: | Countries design programs for supporting
firms, with varying levels of success. Firm growth is
constrained by several factors, such as low firm
capabilities (e.g. management), availability of finance, and
access to markets. Based on the available experimental
evidence on firm support programs in developing countries,
this paper makes three broad observations. First, there are
huge knowledge gaps in understanding the success of
instruments that alleviate firm constraints. Various
instruments, such as early-stage equity finance, incubators,
and accelerators, remain untested due to the lack of good
design, results framework, or monitoring and evaluation
systems and so on. Second, since these interventions are
expensive, policy makers expect such programs to be designed
more effectively to pursue their objectives. However,
evidence provides little guidance on the criterion for firm
selection because the existing evaluations of instruments
reveal little information on the heterogeneous impact by
firm characteristics, such as the age, size, sector, and
location of firms. Third, most interventions seek to address
only one of the broad constraints faced by firms. To this
end, the paper concludes with a novel proposal for a firm
support program that attempts to sequentially address
multiple constraints to firm growth. This program will be
implemented in Malawi through the "Financial Inclusion
and Entrepreneurship Scaling" project. |
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