Behind the GATE Experiment:  Evidence on Effects of and Rationales for Subsidized Entrepreneurship Training
Rob Fairlie (University of California)
Various theories of market failures and targeting motivate the promotion of entrepreneurship training programs throughout the world. Using data from the largest randomized control trial ever conducted on entrepreneurship training, we examine the validity of such motivations and find that training does not have strong effects (in either relative or absolute terms) on those most likely to face credit or human capital constraints, or labor market discrimination. On the other hand, training does have a relatively strong short-run effect on business ownership for those unemployed at baseline, but not at other horizons or for other outcomes. On average, training increases short-run business ownership and employment, but there is no evidence of broader.
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Ability Dispersion and Team Performance: A Field Experiment
Sander Hoogendoorn (UvA)
This paper studies the impact of dispersion in cognitive ability among members of a team on their performance. We conduct a field experiment in which teams start up and manage real companies under identical circumstances. Exogenous variation in – otherwise random – team composition is imposed by assigning individuals to teams based on their measured cognitive abilities. The setting is one of (business) management practices in the longer run where tasks are diverse and involve complex decision-making. We propose a model in which greater ability dispersion generates greater knowledge for a team, but also reduces the effectiveness of monitoring to detect and punish shirking. Consistent with the predictions of our model, we find that team performance in terms of sales, profits and shareholder value first increases and then decreases with ability dispersion. Teams with a moderate degree of ability dispersion also experience fewer dismissals due to fewer shirking members in those teams.