Working Paper: CEPR ID: DP17789
Authors: Ana Cusolito; Ornella Darova; David McKenzie
Abstract: The limited market size of many small emerging economies is a key constraint to the growth of innovative small and medium enterprises. Exporting offers a potential solution, but firms may struggle to locate and appeal to foreign buyers. We conducted a six-country randomized experiment with 225 firms in the Western Balkans to test the effectiveness of 30 hours of live group-based training and 5 hours of one-on-one remote consulting in overcoming these constraints. Treated firms used techniques such as search engine optimization and improved Facebook content to increase their digital presence and better reach foreign customers. A year later, we find positive and significant impacts on the number of customers, and a significant intensive margin increase in export sales. Qualitative interviews suggest this improvement came from a combination of sector-specific advice on market expansion, and through an encouragement effect which gave entrepreneurs the confidence to try new sales strategies.
Keywords: Export Market Expansion; Training; Consulting; Digital Presence; Customer Acquisition
JEL Codes: F14; O25; O12; L26; C93
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| PowerUp capacity-building program (O22) | digital presence of SMEs (L25) |
| PowerUp capacity-building program (O22) | number of customers for SMEs (L25) |
| PowerUp capacity-building program (O22) | export sales at the intensive margin for SMEs (F14) |