Identifying policies and programs that increase private sector firms’ productivity and growth may have important consequences for development and poverty alleviation. J-PAL’s Firms sector seeks to evaluate what works best in generating firm growth and raising productivity. The sector also seeks to test the impact of these policies on employee welfare, the environment, and the broader economy.
J-PAL affiliates’ research in this sector focuses on understanding and relieving constraints to generating firm growth. Topics of study include the impacts of management practice improvements, the impacts of policies that facilitate access to markets and global value chains, effective policy levers for firm expansion, and the importance of large firms in generating employment. We hope that new research in the sector will explore the role that firms play in driving economic growth, whether the size of firms generates or reduces inequality, and whether firms’ gains trickle down to their employees.
In addition to supporting policymakers in applying evidence from randomized evaluations to their work, sector chairs and staff write evaluation summaries and policy publications that synthesize general lessons emerging from the research.
Compared to their counterparts in high-income countries, small and medium enterprises (SMEs) in low-and-middle-income countries are often less productive, grow slower, and hire fewer workers.
Researchers evaluated the impact of a reform to the pollution audit system in India, making auditors more independent, on the truthfulness of their reporting and the behavior of the firms they audited.
Researchers evaluated whether the ethnicities of wholesale buyers and sellers in Chennai, India, affected the transaction terms. They found that traders offered lower prices to buyers of the same ethnicity, but not necessarily because they trusted them more.
Many governments and organizations use finance and management training as a tool to promote small and medium enterprise growth in developing countries, but it is not clear whether or how information from these trainings is shared across SMEs operating in the same area.
Subsidizing entrepreneurship training in the United States did not improve access to training services or promoted employment among groups affected by discrimination.