When is Capital Enough to Get Female Enterprises Growing? Evidence from a Randomized Experiment in Ghana
Standard models of investment predict that credit-constrained firms should grow rapidly when given additional capital, and that how this capital is provided should not affect decisions to invest in the business or consume the capital. The authors r...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110623170731 http://hdl.handle.net/10986/3470 |
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okr-10986-34702021-04-23T14:02:10Z When is Capital Enough to Get Female Enterprises Growing? Evidence from a Randomized Experiment in Ghana Fafchamps, Marcel McKenzie, David Quinn, Simon Woodruff, Christopher ACCOUNTING AFFILIATED ORGANIZATIONS AGRICULTURE ARBITRAGE CAPITAL GRANT CAPITAL GRANTS CAPITAL REQUIREMENT CAPITAL STOCK CAPITAL STOCKS CASH TRANSFER CASH TRANSFERS CHECKS COMMITMENT DEVICE CONSUMER PRICE INDEX CONSUMERS CREDIT ASSOCIATIONS DATA COLLECTION DEVELOPING COUNTRIES DEVELOPMENT POLICY DEVELOPMENT RESEARCH DISCOUNT RATE DISCOUNT RATES DIVESTMENT DUMMY VARIABLES DURABLE EQUILIBRIUM EQUIPMENT EXCESS LIQUIDITY EXPENDITURE EXPENDITURES EXPERIMENTAL DESIGN EXPERIMENTS FARMING HOUSEHOLDS FINANCIAL SUPPORT FORMAL LOAN FUNGIBLE HOUSEHOLD BARGAINING HOUSEHOLD INCOME HOUSEHOLD WEALTH HUMAN CAPITAL ILLIQUIDITY IMPERFECT SUBSTITUTES IMPLICIT TAX INTEREST RATES INTERNATIONAL BANK INTERVIEWS INVENTORIES INVENTORY INVESTING INVESTMENT DECISIONS LABOR MARKET LIQUID ASSETS LIQUIDITY LOCAL BANK MACHINERY MICROENTERPRISES MODELING NEGATIVE INTEREST RATES PRODUCTIVE INVESTMENTS RESEARCH WORKING PAPERS RETURN RETURNS RETURNS TO SCALE RISK AVERSION SAVINGS SAVINGS ACCOUNT SAVINGS DEPOSIT SAVINGS RATE SHARE OF ASSETS SMALL BUSINESSES SOCIAL NETWORKS STATEMENT STATEMENTS STOCK DATA TAX TAX RATE TAXATION TIME LAG TURNOVER VALIDITY VALUE ADDED WAGES WORKING CAPITAL Standard models of investment predict that credit-constrained firms should grow rapidly when given additional capital, and that how this capital is provided should not affect decisions to invest in the business or consume the capital. The authors randomly gave cash and in-kind grants to male- and female-owned microenterprises in urban Ghana. Their findings cast doubt on the ability of capital alone to stimulate the growth of female microenterprises. First, while the average treatment effects of the in-kind grants are large and positive for both males and females, the gain in profits is almost zero for women with initial profits below the median, suggesting that capital alone is not enough to grow subsistence enterprises owned by women. Second, for women they strongly reject equality of the cash and in-kind grants; only in-kind grants lead to growth in business profits. The results for men also suggest a lower impact of cash, but differences between cash and in-kind grants are less robust. The difference in the effects of cash and in-kind grants is associated more with a lack of self-control than with external pressure. As a result, the manner in which funding is provided affects microenterprise growth. 2012-03-19T18:03:01Z 2012-03-19T18:03:01Z 2011-06-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110623170731 http://hdl.handle.net/10986/3470 English Policy Research working paper ; no. WPS 5706 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Africa Africa West Africa Sub-Saharan Africa Ghana |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING AFFILIATED ORGANIZATIONS AGRICULTURE ARBITRAGE CAPITAL GRANT CAPITAL GRANTS CAPITAL REQUIREMENT CAPITAL STOCK CAPITAL STOCKS CASH TRANSFER CASH TRANSFERS CHECKS COMMITMENT DEVICE CONSUMER PRICE INDEX CONSUMERS CREDIT ASSOCIATIONS DATA COLLECTION DEVELOPING COUNTRIES DEVELOPMENT POLICY DEVELOPMENT RESEARCH DISCOUNT RATE DISCOUNT RATES DIVESTMENT DUMMY VARIABLES DURABLE EQUILIBRIUM EQUIPMENT EXCESS LIQUIDITY EXPENDITURE EXPENDITURES EXPERIMENTAL DESIGN EXPERIMENTS FARMING HOUSEHOLDS FINANCIAL SUPPORT FORMAL LOAN FUNGIBLE HOUSEHOLD BARGAINING HOUSEHOLD INCOME HOUSEHOLD WEALTH HUMAN CAPITAL ILLIQUIDITY IMPERFECT SUBSTITUTES IMPLICIT TAX INTEREST RATES INTERNATIONAL BANK INTERVIEWS INVENTORIES INVENTORY INVESTING INVESTMENT DECISIONS LABOR MARKET LIQUID ASSETS LIQUIDITY LOCAL BANK MACHINERY MICROENTERPRISES MODELING NEGATIVE INTEREST RATES PRODUCTIVE INVESTMENTS RESEARCH WORKING PAPERS RETURN RETURNS RETURNS TO SCALE RISK AVERSION SAVINGS SAVINGS ACCOUNT SAVINGS DEPOSIT SAVINGS RATE SHARE OF ASSETS SMALL BUSINESSES SOCIAL NETWORKS STATEMENT STATEMENTS STOCK DATA TAX TAX RATE TAXATION TIME LAG TURNOVER VALIDITY VALUE ADDED WAGES WORKING CAPITAL |
| spellingShingle |
ACCOUNTING AFFILIATED ORGANIZATIONS AGRICULTURE ARBITRAGE CAPITAL GRANT CAPITAL GRANTS CAPITAL REQUIREMENT CAPITAL STOCK CAPITAL STOCKS CASH TRANSFER CASH TRANSFERS CHECKS COMMITMENT DEVICE CONSUMER PRICE INDEX CONSUMERS CREDIT ASSOCIATIONS DATA COLLECTION DEVELOPING COUNTRIES DEVELOPMENT POLICY DEVELOPMENT RESEARCH DISCOUNT RATE DISCOUNT RATES DIVESTMENT DUMMY VARIABLES DURABLE EQUILIBRIUM EQUIPMENT EXCESS LIQUIDITY EXPENDITURE EXPENDITURES EXPERIMENTAL DESIGN EXPERIMENTS FARMING HOUSEHOLDS FINANCIAL SUPPORT FORMAL LOAN FUNGIBLE HOUSEHOLD BARGAINING HOUSEHOLD INCOME HOUSEHOLD WEALTH HUMAN CAPITAL ILLIQUIDITY IMPERFECT SUBSTITUTES IMPLICIT TAX INTEREST RATES INTERNATIONAL BANK INTERVIEWS INVENTORIES INVENTORY INVESTING INVESTMENT DECISIONS LABOR MARKET LIQUID ASSETS LIQUIDITY LOCAL BANK MACHINERY MICROENTERPRISES MODELING NEGATIVE INTEREST RATES PRODUCTIVE INVESTMENTS RESEARCH WORKING PAPERS RETURN RETURNS RETURNS TO SCALE RISK AVERSION SAVINGS SAVINGS ACCOUNT SAVINGS DEPOSIT SAVINGS RATE SHARE OF ASSETS SMALL BUSINESSES SOCIAL NETWORKS STATEMENT STATEMENTS STOCK DATA TAX TAX RATE TAXATION TIME LAG TURNOVER VALIDITY VALUE ADDED WAGES WORKING CAPITAL Fafchamps, Marcel McKenzie, David Quinn, Simon Woodruff, Christopher When is Capital Enough to Get Female Enterprises Growing? Evidence from a Randomized Experiment in Ghana |
| geographic_facet |
Africa Africa West Africa Sub-Saharan Africa Ghana |
| relation |
Policy Research working paper ; no. WPS 5706 |
| description |
Standard models of investment predict
that credit-constrained firms should grow rapidly when given
additional capital, and that how this capital is provided
should not affect decisions to invest in the business or
consume the capital. The authors randomly gave cash and
in-kind grants to male- and female-owned microenterprises in
urban Ghana. Their findings cast doubt on the ability of
capital alone to stimulate the growth of female
microenterprises. First, while the average treatment effects
of the in-kind grants are large and positive for both males
and females, the gain in profits is almost zero for women
with initial profits below the median, suggesting that
capital alone is not enough to grow subsistence enterprises
owned by women. Second, for women they strongly reject
equality of the cash and in-kind grants; only in-kind grants
lead to growth in business profits. The results for men also
suggest a lower impact of cash, but differences between cash
and in-kind grants are less robust. The difference in the
effects of cash and in-kind grants is associated more with a
lack of self-control than with external pressure. As a
result, the manner in which funding is provided affects
microenterprise growth. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Fafchamps, Marcel McKenzie, David Quinn, Simon Woodruff, Christopher |
| author_facet |
Fafchamps, Marcel McKenzie, David Quinn, Simon Woodruff, Christopher |
| author_sort |
Fafchamps, Marcel |
| title |
When is Capital Enough to Get Female Enterprises Growing? Evidence from a Randomized Experiment in Ghana |
| title_short |
When is Capital Enough to Get Female Enterprises Growing? Evidence from a Randomized Experiment in Ghana |
| title_full |
When is Capital Enough to Get Female Enterprises Growing? Evidence from a Randomized Experiment in Ghana |
| title_fullStr |
When is Capital Enough to Get Female Enterprises Growing? Evidence from a Randomized Experiment in Ghana |
| title_full_unstemmed |
When is Capital Enough to Get Female Enterprises Growing? Evidence from a Randomized Experiment in Ghana |
| title_sort |
when is capital enough to get female enterprises growing? evidence from a randomized experiment in ghana |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110623170731 http://hdl.handle.net/10986/3470 |
| _version_ |
1764387052145606656 |