• Returns to human capital;
  • Micro business;
  • Economic transition;
  • Lao PDR
  • I28;
  • L26;
  • P25

This paper examines the determinants of performance in 1,776 micro and small enterprises that represent all industry sectors and geographical regions in Lao PDR. Although considerable resources are being directed toward promotion schemes in the country, empirical research on this subject is very limited. This study provides concrete insights into development strategies, particularly investment in basic education. The impact of business experience is small and insignificant. The differences between urban and rural, and Lao and ethnic minorities are narrowing in the younger generation, but still remain very large. The difference between male and female entrepreneurs found in most reports is rejected regardless of region, groups, and generation. These findings would help to formulate further efforts attempting to promote this sector.