The Impact of Financial Literacy on Medium and Large Enterprises – Evidence from a Randomized Controlled Trial in Mozambique

A randomized controlled trial (RCT) with medium and large companies in Mozambique identifies a positive treatment effect of a finance Executive Education programme for top managers on financial policies and firm profitability. Using survey data as well as financial accounting data, we find that managers adjust firm financial policies in response to the treatment. The largest treatment effects are for policies related to working capital. We also find these policy changes to improve firms’ efficiency. Our results suggest that relatively small and low-cost interventions such as a short Executive Education programme in finance improves financial practices and can ultimately affect economic development.