PhD defense: Lars Ivar Oppedal Berge

On Tuesday 21 June 2011 Lars Ivar Oppedal Berge will hold a trial lecture on a prescribed topic, and defend his thesis for the PhD degree at NHH.

20.06.2011 - Ed.

Prescribed topic for the trial lecture
Should more development assistance be randomized to make it better in the long term?

Time of the trial lecture
10:15 in Karl Borch's Auditorium, NHH

Title of the thesis
Entrepreneurship in development: Four essays on microfinance and business training

Time and place for the defense
12:15 in Karl Borch's Auditorium, NHH

Members of the evaluation committee
Associate professor Erik Ø. Sørensen, NHH (chairperson)
Professor Jakob Svensson, University of Stockholm
Professor Karl Ove Moene, University of Oslo

Supervising committee
Professor Kjetil Bjorvatn, NHH (principal supervisor)
Professor Bertil Tungodden, NHH
Professor Dean S. Karlan, Yale University

Abstract
Which is the most the binding constraint for microenterprise development; human or financial capital? To answer this question, we present the first field experiment that jointly investigates these two constraints, by giving poor entrepreneurs, all members of the microfinance institution (MFI) PRIDE Tanzania, treatments in the form of either business training or a business grant, or both.

Males and females have increased their knowledge identically, but otherwise the training has had stronger effects with most parameters, for male entrepreneurs. This may indicate that there are other barriers than business knowledge that are more severe for females, such as discrimination in the labour market and at home. In addition, we find no effect of the business grant for either males or females.

The results suggest that human capital may be the more binding constraint for poor micro entrepreneurs, but also point to the need for more comprehensive measures to promote development among female entrepreneurs.

I also study the effect of business training on trained client's group members, where I find evidence of spillover effects for male entrepreneurs on several loan group related outcomes. These include increased loan balances, more loan usage on investments, and increased satisfaction with PRIDE. On average, there are no spillover effects among females. But, for one particular group of females, I find strong effects on business knowledge; namely females in loan groups with only females. This result may indicate that the learning environment in gender mixed groups is inferior to female-only groups.

To further explore the gender biases outlined, we also present findings from a lab experiment involving microfinance clients. Our main finding is that female groups outperform male and mixed groups in problem solving, even though males at the individual level outperform females. These findings indicate that females are more able to cooperate in groups than males, and that males disturb the dynamics of female groups.