Why should banks provide entrepreneurship training seminars?

Abstract

This article examines an apparent contradiction at the heart of the provision of management training and advice for new and small firms. Assessments using self-report data show high levels of satisfaction, implying that the training/advice is effective and appreciated. In contrast, assessments using robust statistical methods point to modest, or even zero, impact upon firm performance. Accordingly, our core research question explores whether there is an identifiable performance benefit of management training or whether impact is limited to emotional attachment to the training provider -reflected in enhanced loyalty. We test this by examining the effects of a bank seminar provided for new enterprises and find it had no significant effects on either the survival or sales growth of participants. However, those new enterprises who participated in the seminar were significantly less likely to switch to a rival bank, implying the seminars may have induced a feeling of loyalty among clients. Finally, we discuss the implications for theory, for the bank and for the providers of training for new and small firms more widely.

The Effects of Human Capital Interventions on Entrepreneurial Performance in Industrialized Countries

“…Coad et al . (), on the other hand, find no changes over time. A short business training appears to have no effect on turnover growth in any of the five years after the training took place.…”

“…Bruhn et al (2018) find that subsidized access to management consulting and mentoring services has no effect on firm size one year after the intervention, yet does have a positive and statistically significant effect three to five years later. Coad et al (2016), on the other hand, find no changes over time. A short business training appears to have no effect on turnover growth in any of the five years after the training took place.…”

“…The intensity and duration are important elements of the interventions. We observe a large variation among the studies that report on them, ranging from a single intervention of two to three hours (Coad et al ., ) to a one‐year intervention of four hours per week (Bruhn et al ., ). Few authors explicitly report the intensity of the intervention () or the time span during which the intervention took place ().…”

“…In one study, matching is conducted on three covariates only, in others, propensity score model specifications are not shown (n = 2), and in yet others, they are shown but not motivated (n = 3). Sometimes, the matching successfully reduces differences between the treatment and control groups (Rodríguez-Planas and Benus, 2010; Elert et al, 2015), sometimes moderate differences remain (Meager et al, 2003;Fajnzylber et al, 2009), and sometimes the imbalance reduction is not shown, impeding assessment of the quality (Rodríguez-Planas, 2010; Coad et al, 2016). One reason for the unsuccessful balancing of treatment and control groups may lie in the way that propensity scores are modeled.…”

Innovation through R&D activities in the European context: antecedents and consequences

“…We approach to this external knowledge by using a binary variable which takes the value 1 if the employees have participated in formal training programs outside the firm; and 0 otherwise. Coad et al (2016) and Storey (2004) have used similar variables, in which the training has come from banks or other companies, respectively.…”