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October 2012

Is Business Training for Women’s Subsistence Businesses Futile?

David McKenzie's picture

After finding that gifts of capital had no impact on the growth of female-owned subsistence firms in Sri Lanka and Ghana, in a recent paper (with Chris Woodruff and Suresh de Mel) I test whether business training can help poor women in Sri Lanka start and grow their businesses. A new 2-page impact note summarizes the results of the full paper. The even shorter version is that the ILO’s Start and Improve Your Business Training:

  • has no significant impact on the survival or growth of existing subsistence enterprises run by women in either the short or the medium run.
  • Speeds up entry into business of women out of the labor force who would like to start businesses, although the control group catches up after a year.
  • Leads to less analytically skilled women starting new businesses.
  • Makes the new businesses started by women more profitable

Trends in new firm creation through the crisis and into recovery

Leora Klapper's picture

A recession is a difficult time to start a business. Credit is tight, consumers are wary, and the future appears uncertain. It seems logical that entrepreneurs would have been deterred from starting a new business during the 2008-09 global financial crisis, but how widespread was this phenomenon, and are there signs that new firm creation has begun to recover?  The 2012 Entrepreneurship Database released today provides a novel look at these trends.

Banking Union for Europe – Risks and Challenges

Thorsten Beck's picture

The Eurozone crisis has gone through its fair share of buzz words — fiscal compact, growth compact, Big Bazooka.  The latest kid on the block is the banking union. Although it has been discussed by economists since even before the 2007 crisis, it has moved up to the top of the Eurozone agenda.  But what kind of banking union?  For whom? Financed how?  And managed by whom?

A new collection of short essays by leading economists on both sides of the Atlantic — including Josh Aizenman, Franklin Allen, Viral Acharya, Luis Garicano, and Charles Goodhart — takes a closer look at the concept of a banking union for Europe, including the macroeconomic perspective in the context of the current crisis, institutional details, and political economy. The authors do not necessarily agree and point to lots of tradeoffs.  However, several consistent messages come out of this collection:

Bank Ownership, Lending, and Local Economic Performance During the 2008 Financial Crisis

In September 2008, the collapse of the Lehman Brothers investment bank precipitated a financial crisis and a sharp decline in international credit. Massive layoffs and an economic recession in the U.S. and many industrialized and developing countries ensued. In some countries, however, the effects of the financial crisis were limited and short-lived. This was true for Brazil and China, both of which continued to experience high rates of economic growth in subsequent years. A cited reason for these countries’ relative success during this period has been government involvement in the banking sector 1.

Bank Ownership and Lending Patterns during the 2008-2009 Financial Crisis: Evidence from Latin America and Eastern Europe

Maria Soledad Martinez Peria's picture

The recent global financial crisis reignited the debate on the ownership structure of the banking sector and its consequences for financial intermediation. Some have pointed to the presence of foreign banks in developing countries as a key mechanism for transmitting the 2008-2009 crisis from advanced to developing countries (e.g., IMF, 2009). At the same time, developing countries like Brazil, China, and India, where government-owned banks are systemically important, recovered quickly from the crisis, generating interest in the potential mitigating role that these banks can play during periods of financial distress. [1]