Developing sustainable supply chains: Evidence from entrepreneurship training in Ethiopia

Abstract

Multinational firms often face challenges in integrating host-country suppliers into their global value chains; this is particularly the case in developing economies. Training entrepreneurs is one approach to improve supplier integration. We conducted a randomized controlled trial (RCT) to measure the efficacy of entrepreneurship training of unskilled workers’ participation and performance in an animal bones supply chain in Ethiopia. The aim of this supply chain was to recycle the naturally occurring phosphorus from bones and convert it into fertilizer. Our results show that training increased worker participation. We also provide evidence that training increased performance, but problems with the RCT implementation make these results more nuanced. We present some lessons learned for future researchers who are seeking to conduct similar RCTs. Our findings will be of interest to multinational enterprises seeking to develop supply chains for disaggregated resources, to governments seeking foreign direct investment, and to NGOs seeking to create jobs.