Complementing managerial capital with business information

Project overview

Project lead: Naufel Vilcassim, London Business School

Start date: 1 October 2014

End date: 31 October 2017

Research Council project page

This research project aimed to address a significant constraint to growth among businesses in developing countries: managerial capital.

Managerial capital refers to the capabilities and confidence associated with managing cash, customers, competition, capital and constraints within businesses (cf. Bruhn, Karlan and Schoar 2012). Improvements in managerial capital offer the possibility of improved growth and prosperity. However, there exists substantial evidence that it is not abundant among micro and small businesses.

This research examined how managerial capital might help entrepreneurs in developing countries to transform their businesses: from micro-to small-sized enterprises and from small- to medium-sized enterprises. Despite the importance of this transformation for economic growth, few researchers had examined this phenomenon empirically prior to this project.

The research aimed to address the limitations of prior work, by implementing a randomised-controlled trial (RCT) that focuses on a more homogeneous group of firms, using a more intense intervention, providing consulting programs that focus on only one dimension of managerial capital per project, and improving access to business information.