Randomized Control Trials

Hasan Bakhshi, of the U.K.'s National Endowment for Science Technology and the Arts (NESTA), posts about randomized control trials for assessing the outcomes of innovation policy. I have long struggled with concerns over selection bias in evaluations of policy and education programs. This is a very important discussion. It is an especially salient thought when considering evaluation of entrepreneurship training programs or policies designed to increase the number of/success of entrepreneurs, as there are huge self-selection issues associated with entrepreneurial intent.

The Fairlie et al. GATE study comes to mind as an example of a recent randomized control trial on entrepreneurship training programs. Do you know of any others? Let us know in the comments.

Comments

[Timothyogden]

I don't know of any in the developed world context, but in the developing world there are a number of studies looking at entrepreneurial or business training, access to finance and other factors that may affect the incidence and/or success of entrepreneurship (with the caveat that these are overwhelmingly necessity rather than opportunity entrepreneurs):

1) Karlan and Valdivia in Peru looking at business training
2) McKenzie et al in Sri Lanka looking at cash grants to entrepreneurs
3) Banerjee, Duflo et al looking at access to microcredit and impact on start-ups
4) McKenzie et al in Ghana looking at cash grants vs in-kind working capital grants
5) Dupas and Robinson in Kenya looking at access to savings accounts
6) Fisher and Schoar in DR looking at financial/accounting training
7) Karlan and Mullainathan in India and the Philippines looking at cash grants and financial literacy training
8) McKenzie et al have a forthcoming paper on an RCT providing training and wage subsidies in Sri Lanka
9) Karlan and Woodruff have a forthcoming paper on microinsurance impact on technology investment in farming
10) Even Bloom et als work with business consulting for SMEs in India has some relevance.

I think the insight offered by such studies in the developing world is extremely undervalued for analysis of developed world entrepreneurs--at least the vast majority of developed world entrepreneurs who are not high-growth candidates.

But based on looking at the extant research on both sides of the coin, my current belief is that we know next-to-nothing about how to encourage productive entrepreneurship or increase success rates.