DP10597 Identifying Gazelles: Expert Panels vs. Surveys as a Means to Identify Firms with Rapid Growth Potential

Author(s): Marcel Fafchamps, Christopher Woodruff
Publication Date: May 2015
Keyword(s): business plan competitions, firm growth, high growth entrepreneurship
JEL(s): J24, L26, O1
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=10597

We conduct a business plan competition to test whether survey instruments or panel judges are able to identify the fastest growing firms. Participants submitted six- to eight-page business plans and defended them before a three- or four-judge panel. We surveyed applicants shortly after they applied, and one and two years after the competition. We use follow-up surveys to construct measures of enterprise growth potential. We find that a measure of ability correlates strongly with future growth, but that panel scores add to predictive power even after controlling for ability and other survey variables. The survey questions have more power to explain the variance in growth. Participants presenting before the panel were given a chance to win customized management training. Fourteen months after the training, we find no positive effect of the training on growth of the business.