World Bank Group
As Publisher

"Why do more small firms in developing countries not use the market for professional business services like accounting, marketing, and human resource specialists? Two key reasons maybe that firms lack information about the availability of these services, and that they struggle to distinguish the quality of good versus bad providers. A brand recognition exercise finds that most small firms are unaware of most providers in this market, and a survey of service providers reveals that they largely rely on word-of-mouth and informal reputation mechanisms for acquiring customers. This study set up a business services marketplace that contains information about the different providers present in the market and used mystery shopper visits to develop a quality ratings system. A randomized experiment with more than 1,000 firms provided access to this marketplace to the treatment group and randomized whether firms received just information or also quality ratings. The provision of quality ratings information shifts small firms’ preferences over which provider they would like to use, increasing the average quality rating of their preferred providers by 0.2 to 0.4 ratings points out of 5. However, neither the provision of information nor these quality ratings had any significant impact on the likelihood that small firms go on to hire a business service provider over the subsequent six months. The results suggest that alleviating information frictions alone is insufficient to increase usage of professional business services."

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"This paper provides a comprehensive assessment of the short-term impact of the COVID-19 pandemic on businesses worldwide with a focus on developing countries. The results are based on a novel data set collected by the World Bank Group and several partner institutions in 51 countries covering more than 100,000 businesses. The paper provides several stylized facts. First, the COVID-19 shock has been severe and widespread across firms, with persistent negative impact on sales. Second, the employment adjustment has operated mostly along the intensive margin (that is leave of absence and reduction in hours), with a small share of firms laying off workers. Third, smaller firms are disproportionately facing greater financial constraints. Fourth, firms are increasingly relying on digital solutions as a response to the shock. Fifth, there is great uncertainty about the future, especially among firms that have experienced a larger drop in sales, which is associated with job losses. These findings provide a better understanding of the magnitude and distribution of the shock, the main channels affecting businesses, and how firms are adjusting. The paper concludes by discussing some avenues for future research."

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"Women, Business and the Law 2020 is the sixth in a series of studies that analyze laws and regulations affecting women's economic opportunity in 190 economies. Eight indicators-structured around women's interactions with the law as they begin, progress through, and end their careers-align with the economic decisions women make at various stages of their lives. The indicators are Mobility, Workplace, Pay, Marriage, Parenthood, Entrepreneurship, Assets, and Pension."

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"Many small firms lack the finance and marketing skills needed for firm growth. The standard approach in many business support programs is to attempt to train the entrepreneur to develop these skills, through classroom-based training or personalized consulting. However, rather than requiring the entrepreneur to be a jack-of-all-trades, an alternative is to move beyond the boundary of the entrepreneur and link firms to these skills in a marketplace through insourcing workers with functional expertise or outsourcing tasks to professional specialists. A randomized experiment in Nigeria tests the relative effectiveness of these four different approaches to improving business practices. Insourcing and outsourcing both dominate business training; and do at least as well as business consulting at one-half of the cost. Moving beyond the entrepreneurial boundary enables firms to use higher quality digital marketing practices, innovate more, and achieve greater sales and profits growth over a two-year horizon."

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"Differences in management quality are an important contributor to productivity differences across countries. A key question is how to best improve poor management in developing countries. This paper tests two different approaches to improving management in Colombian auto parts firms. The first uses intensive and expensive one-on-one consulting, while the second draws on agricultural extension approaches to provide consulting to small groups of firms at approximately one-third of the cost of the individual approach. Both approaches lead to improvements in management practices of a similar magnitude (8-10 percentage points), so that the new group-based approach dominates on a cost-benefit basis. Moreover, the paper finds some evidence that the group-based intervention led to increases in firm size over the next three years, while the impacts on firm outcomes are smaller and statistically insignificant for the individual consulting. The results point to the potential of group-based approaches as a pathway to scaling up management improvements."

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"This paper identifies separate and unique pathways to profits among small businesses in South Africa that are exposed to marketing or finance training in a randomized control study. The marketing group achieves greater profits by adopting a growth focus on higher sales, greater investments in stock and materials, and hiring more employees. The finance group achieves similar profit gains but through an efficiency focus on lower costs. Both groups show significantly higher adoption of business practices related to their respective training program. Consistent with a growth focus, marketing/sales skills are significantly more beneficial to firm owners who ex ante have less exposure to different business contexts. In contrast and in line with an efficiency focus, entrepreneurs who have been running more established businesses prior to training benefit significantly more from finance/accounting skills."

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"Women play a key role in the economies of sub-Saharan Africa. In fact, sub-Saharan Africa is the only region where women make up the majority of those who are entrepreneurs. However, a range of impediments render women's businesses less productive and having fewer employees than those owned by men. This new report seeks to focus attention on the challenges that Africa's women entrepreneurs face and identify practical solutions. The report draws on new, high-quality, household and firm level data to present the clearest evidence to date about the barriers to growth and profitability faced by women entrepreneurs. The report offers policy makers evidence-based guidance on designing programs to target multiple obstacles and improve the performance of women entrepreneurs."

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"Creating Markets has been part of the World Bank Group's development agenda for at least the last 15 years. The 2002 World Bank Group's Private Sector Development Strategy, for example, identified the ingredients for market creation, including sound rules, the expectation that such rules be adhered to, and physical access to markets. Because of IFC's and the Bank Group's long history supporting market creation in its client countries, the Independent Evaluation Group (IEG) has identified many lessons of experience in recent evaluations that are relevant to such efforts.

As the IFC implements its new corporate strategy, the rationale for this evaluation is to share those lessons of experience and add to them with findings from a set of purposefully selected case studies across sectors and countries at different stages of development."

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"Para entender melhor como as discriminações legais afetam o emprego e o empreendedorismo das mulheres, o estudo Mulheres, Empresas e o Direito 2019: uma Década de Reformas examina dez anos de dados por meio de um índice estruturado com base nas decisões econômicas tomadas pelas mulheres ao longo de suas vidas profissionais. O índice explora como as leis afetam as decisões econômicas tomadas por mulheres de diversos perfis - desde uma jovem de 25 anos que acabou de conseguir seu primeiro emprego, ou uma mãe que concilia o trabalho e a criação dos filhos, até a mulher que está prestes a se aposentar."

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SMEs form a dominant share of the private sector in developing countries, and account for more than 50
percent of jobs in their respective economies. Besides their positive employment effects, the growth and
vibrancy of these firms is also important for broader economic growth, diversification of economic base
and as a source of innovation that is exhibited by some of the start-ups. Women-owned SMEs are
emerging as one of the fast growing segments within the SME sector. Youth play an important role in the
creation of new firms and start up activities. Given this importance of SMEs for creation of more, better
and inclusive jobs, there is significant focus on understanding the constraints to growth of this sector and
implementing programs to address them in the World Bank Group and the other development
institutions. Among the several constraints that they face, access to finance is usually cited as the most
important and there are several instruments that can be applied to address this constraint. However, what
is the evidence of impact of these programs on the employment effects? This note brings together the
learnings and evidence from access to finance interventions on employment and provides some
recommendations for development practitioners who seek to maximize this objective from their access
to finance interventions.

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