Identifying and teaching high-growth entrepreneurship: Experimental evidence from university academies in Uganda

• Applicant: Dr. Vojtech Bartos, since 7/2020
• Subject Area: Economic Policy, Applied Economics
• Term: since 2020
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 444754857

We aim to study i) the effects of entrepreneurship training on individual labor market and business outcomes for high-skilled university students in Uganda, ii) selection mechanisms into entrepreneurship, in particular the importance of motives, cognitive and non-cognitive traits, and iii) credit market constraints businesses founded during the entrepreneurship training face. We utilize the gold standard in evidence-based research, a randomized control trial (RCT), to causally answer the research questions.We sample 2.400 university students in Uganda across three waves of the entrepreneurship training program. First, we randomly manipulate whether information sessions advertising the training emphasize either creative freedom or financial independence as key benefits of entrepreneurship to prospective applicants. This allows us to study selection mechanisms associated with different motivations. Second, we admit applicants to the training program on a random basis. This allows us to causally identify the effect of training participation among those who applied. Third, we use business proposals of students graduating from the training to examine the credit market constraints newly funded businesses face. Local financiers evaluate the proposals and predict business success rates. We benchmark these predictions to predictions made by German students and by predictive machine learning techniques. In order to understand if discrimination also acts as a constraint to credit market access, we experimentally manipulate personal information disclosed in the business plans. The experimental design is complemented by extensive data collection. To identify short-, medium, -and long-term effects of the training program, we collect data before, and at several points after the entrepreneurship training ends. This also allows us to study what types of students are attracted and how they differ from the general population of students not attracted by the training. Beyond business and labor market outcomes, we measure cognitive and non-cognitive traits. This allows us to study whether students select into entrepreneurship based on specific permutations of these traits, and/or whether the training program shapes certain traits in ways conducive to entrepreneurial success. We make multiple contributions to the field of economic development. First, we contribute to the literature on entrepreneurship trainings in low-income countries. Second, we contribute to the literature on selection into entrepreneurship, focusing on the role of cognitive and non-cognitive traits, and their role for entrepreneurial success. Third, we contribute towards our understanding of barriers to financial access at business entry.

• DFG Programme: Research Grants
• Ehemalige Antragstellerin: Dr. Kristina Czura, until 7/2020