Erschienen in:Asian Development Bank Economics Working Paper Series ; No. 614
Umfang:
1 Online-Ressource (37 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.3591005
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments Apr 22, 2020 erstellt
Beschreibung:
This paper develops a theoretical framework to explain the limited effect of business development programs (BDPs) on entrepreneurs' profits. We argue that a mismatch between a BDP's narrow focus on business-promoting strategies and the wider context in which microentrepreneurs operate can limit the impact of business training. In our framework, entrepreneurs are ambiguity averse and have multiple sources of income (e.g., business and wage incomes). We show that for a sufficiently ambiguity-averse entrepreneur with multiple income sources, efficient training can result in a decline in expected profit. Notably, when the wider context (multiple income sources, ambiguity aversion) is considered, the business training impact is limited and can result in a posttraining expected profit decline. This limited impact is caused by the diversifying role that the business income plays in household finances