Entrepreneurship training and entrepreneurs' perceptions of ability: A randomized control trial in Tanzania

Abstract

This study examines whether training entrepreneurs to apply systematic approaches to strategic decision-making influences their self-perception of ability. Using a field experiment in which 151 entrepreneurs in Tanzania were randomly assigned to two different versions of entrepreneurial training (anevidence-basedvs. atheory-and-evidence-basedapproach), we find entrepreneurs in thetheory-and-evidence-basedcondition experience a larger and more persistent increase in their self-perception of ability to deal with challenges compared to theevidence-basedcondition. Additionally, entrepreneurs across the two conditions respond differently to the training depending on their initial levels of perceived ability. By integrating insights from social cognitive psychology, this study contributes to research on entrepreneurial experimentation by uncovering the effect of strategic decision-making training on individuals themselves, not just their ventures' outcomes. Entrepreneurs' self-perceptions of ability are critical for how they engage with learning opportunities and respond to challenges that arise as they develop their businesses. To explore how different versions of training on strategic decision-making impact entrepreneurs' self-perceived abilities to deal with such challenges, we conducted a field experiment with Tanzanian agribusiness entrepreneurs. Results show that entrepreneurs who learn to develop a theory-of-value before engaging in experimentation experience a larger increase in self-perceived ability compared to those who experiment without such a theory-of-value, and this effect persists for longer. Our results have practical value for entrepreneurs and support organizations offering training programs and point to self-perception of ability as an important factor to help entrepreneurs follow the behavioral advice they receive during those trainings.