We dig deeper into this churn in business practices in Table 3, looking at the individual practices that make up the planning and accounting practice indices (Appendix Table C2 does the same for marketing practices). By looking at specific practices, we can examine whether the lack of sustained impact on business practices is due to the treatment group being more likely to stop doing practices (falling back), or due to the control group being more likely to add new practices (catching up). Column 1 reports the baseline mean doing each practice, and then columns 2 and 3 the 2- and 6-month treatment impacts on that specific practice. Column 4 then documents how much churn there is in the control group’s use of each practice between the 2- and 6-month follow-ups. For example, 32 percent of the control group either switched from having a written budget to no longer having a budget, or vice versa.

Columns 5 and 6 of Table 3 then calculate treatment impacts on outcomes of improving that practice between 2 and 6 months, and worsening that practice between 2 and 6 months (the residual category being staying the same). We see significant negative impacts of treatment on improving business practices, reflecting control group catch-up, and significant positive impacts on worsening practices, reflecting treatment group falling back. For example, the control group is 6.4 percentage points more likely to have started keeping a budget between 2 and 6 months, while the treatment group is 9.0 percentage points more likely to have stopped keeping a budget. Together these two estimates account for the 15.4 percentage point difference between the 2-month and 6-month ITT estimates for having a written budget. The last column then calculates the proportion of this change in treatment effect that comes from control group catch-up as opposed to the treatment group falling back. For example, for having a written budget this is 6.4/15.4 _=_ 0.42.

This then raises two questions: why did the treatment group stop doing some of these practices, and how was the control group able to adopt some of them without receiving training? We speculate that one reason may be related to the churn in business practices that we observe, which may reflect both the types of individuals who applied to the program and changes in the economy taking place as Mexico came out of the COVID-19 pandemic. Women who responded to advertisements about a business training program may be people who are looking to make changes in their business. In addition, changes in the economy during the pandemic may have made business owners also seek to do something new. This could explain why the control group adopts new practices over time. However, some of these planning and accounting practices may be ones where firms don’t do them all the time, but rather, at some point, decide they need to take a snapshot of what is happening in their business. Training may then have just accelerated this process of trying some of these new practices. In the qualitative surveys, some owners in the treatment group acknowledged that they had had the discipline to implement new practices while training was taking place, but then spoke of losing their ‘discipline’ and reverting back to their old ways once training was over.

Another reason that firm owners may stop doing practices is that they are unable to detect changes in business performance from using these practices, given the amount of volatility and other factors driving sales and profits. Our analysis finds that even with a sample of over 2,000 firms, it is difficult to statistically detect an impact of a 10-13 percent increase 11