The Impact of Financial Education of Executives on Financial Practices of Medium and Large Enterprises

Cláudia Custódio

Imperial College Business School, ECGI, CEPR e NOVAFRICA

Diogo Mendes

Stockholm School of Economics e Swedish House of Finance

Daniel Metzger

Rotterdam School of Management e ECGI

ISSN 2183-0843
Working Paper No 2105
Março 2021


This paper studies the impact of a course in finance for executives of medium and large enterprises through a randomized controlled trial (RCT) in Mozambique. Survey data and accounting data provide consistent evidence that managers change firm financial policies in response to finance education. The largest treatment effect is on short-term financial policies related to working capital. Reductions in accounts receivable and inventories generate an increase in cash flows used to finance long-term investments. Those changes also improve the performance of the treated firms. Overall, our results suggest that relatively small and low-cost interventions, such as a standard executive education program in finance, can help firms to mitigate financial constraints and potentially affect economic development.

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