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Working Paper

Identifying and Spurring High-Growth Entrepreneurship : Experimental Evidence from a Business Plan Competition

EQUIPMENT ACCOUNTING ENTERPRISE DEVELOPMENT CUSTOMER INSTALLATION CERTIFICATE MATERIALS SALES RADIO STATIONS E-COMMERCE MEDIUM ENTERPRISES BUSINESS SCHOOLS INFORMATION SELLING MONITORING ENTREPRENEURIAL SKILL BUSINESS NETWORKS IMPACT ASSESSMENT MEDIUM ENTERPRISE CONSULTANTS IMPACTS NEW PRODUCTS DISTRIBUTION BREAKEVEN ANALYSIS CASHFLOW BUDGET CONSTRAINTS COMPUTER TRAINING PRICE OWNERSHIP VERIFICATION RETAIL TRADE PLANNING TIME PERIOD ENTREPRENEURIAL SKILLS QUALITY PERSONAL INFORMATION REPORTING TRAINING COURSE REGISTRY COMPUTER OPEN ACCESS SATELLITE TELEVISION COST EFFECTIVENESS INSTITUTIONS DATA ADVERTISING TECHNICAL ASSISTANCE COMMERCE CONTROL SYSTEMS ACQUISITION BUSINESS INNOVATION IMPACT EVALUATION LICENSE LOGISTICS TARGETS BUSINESS OWNERSHIP PRODUCTIVITY BUSINESS OPERATION CRITERIA DIRECT COSTS MARKETING MARKETING STRATEGY PRIVATE SECTOR DEVELOPMENT BUSINESS INPUTS INVENTORIES EMPLOYMENT CREATION INVENTORY RADIO ACCOUNT BUSINESS ECONOMICS BUSINESS APPLICATIONS TELEPHONE BUSINESS ORGANIZATION RESOURCES MANUFACTURING PHONE TECHNOLOGY MARKET SEGMENTATION TRAINING COURSES INVENTORY LEVELS VERTICAL INTEGRATION BUSINESS PLAN TIME FRAME SOFTWARE CUSTOMER BASE RESULTS NETWORKS COST PRIVATE SECTOR BALANCE SHEET TRANSPARENT WAY QUALITY CONTROL MARKETING RESEARCH RESULT INNOVATION POLICY SECURITY BUSINESSES BUSINESS IDEAS BUSINESS NETWORK BUSINESS LEADERS PERFORMANCE PURCHASING BUSINESS PLANS FINANCIAL PLANNING INNOVATION INSTITUTION BUSINESS SECTORS PROFIT ACCOUNTS COMMUNICATION QUALITY ASSURANCE NEW TECHNOLOGY CUSTOMERS BUSINESS IDEA COST PER JOB COMMUNICATION TECHNOLOGY PROFITS CUSTOMER DEMAND BUSINESS RESEARCH GROWTH POTENTIAL IMPLEMENTATION TARGET USES CASH FLOW BUSINESS TRAINING
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World Bank, Washington, DC
Africa | Nigeria
2015-08-17T18:07:20Z | 2015-08-17T18:07:20Z | 2015-08

Almost all firms in developing countries have fewer than 10 workers, with the modal firm consisting of just the owner. Are there potential high-growth entrepreneurs with the ability to grow their firms beyond this size? And, if so, can public policy help alleviate the constraints that prevent these entrepreneurs from doing so? A large-scale national business plan competition in Nigeria is used to help provide evidence on these two questions. The competition was launched with much fanfare, and attracted almost 24,000 entrants. Random assignment was used to select some of the winners from a pool of semi-finalists, with US$36 million in randomly allocated grant funding providing each winner with an average of almost US$50,000. Surveys tracking applicants over three years show that winning the business plan competition leads to greater firm entry, higher survival of existing businesses, higher profits and sales, and higher employment, including increases of over 20 percentage points in the likelihood of a firm having 10 or more workers. These effects appear to occur largely through the grants enabling firms to purchase more capital and hire more labor.

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