CEOs Took a Finance Course—and Their Firms Got More Profitable
Sep. 02, 2025
A field experiment in Mozambique by SHoF researchers shows that executive education can transform financial practices, freeing up cash and boosting returns, especially in developing countries.
In Mozambique, many large firms have long struggled with financial constraints. Few have access to formal credit lines, and many operate with inefficient cash management practices. But a recent study suggests that a simple intervention—giving top executives an intensive finance course—can change how companies run their books and invest for growth.
Researchers ran a randomized controlled trial with 92 medium and large firms in Mozambique, offering an 18-hour financial training program to top managers. The course, taught in an MBA-style format, covered valuation, capital budgeting, capital structure, working capital management, and risk management. The goal was to test whether teaching financial best practices to CEOs and CFOs would actually change corporate behavior.
Less Cash Stuck in Operations
The biggest shift came in how firms managed their working capital. Before the course, companies kept large sums of money tied up in day-to-day operations through unpaid customer invoices and excess inventory. After the training, that changed.
The companies that received the training reduced their working capital-to-assets ratio by 0.4 to 0.5 standard deviations, compared to firms that didn’t participate at that time.
“This effect is driven by a reduction in accounts receivable of 0.4 to 1 standard deviation and a reduction in inventories of 0.2 to 0.3 standard deviations,” the researchers say.
Some firms hired additional staff to improve collections, while others started contacting clients more frequently to reduce payment delays. One firm set up a new system to track receivables weekly.
From Operational Cash to Long-Term Investment
Importantly, the freed-up cash didn’t sit idle. Firms reinvested it into their businesses, the study shows.
“Firms used the cash to increase their investment in long-term assets,” the researchers say. Capital expenditures over assets jumped by 9 to 13 percentage points.
Back-of-the-envelope calculations from the study suggest that the average treated firm unlocked about $355,100 from faster collections and $194,300 from reducing inventory—cash that they could channel into expansion, not just cash reserves.
Bigger Returns, Same Sales
The study also shows that in participating firms, sales remained stable, but profitability soared. Return on assets—a key measure of firm profitability—increased by 0.6 to 1.1 standard deviations, or the equivalent of 14 to 23 percentage points.
“The increase in ROA is not explained by increased sales or a change in the sales-to-assets ratio,” the researchers say. “Instead, treated firms seem to become more efficient in their use of cash.”
Who Benefited the Most?
The financial training wasn’t equally effective for all firms. Companies where managers had more decision-making power saw larger changes.
Smaller firms and those with tighter financial constraints benefited more. Executives with no prior formal training in finance or accounting learned the most but only if they had they had a masters degree or higher.
“Participants with a higher degree of formal education profit more from our intervention, suggesting that a certain level of education might be needed to grasp the theoretical concepts and their implications, and to implement them in practice,” the researchers say.
A Scalable Solution for Growth?
The findings suggest that building managerial capital can unlock real productivity gains, even in environments with financial constraints and underdeveloped capital markets.
“Overall, our results show that financial expertise of managers are important for firm policies and that relatively small-scale financial education programs can improve financial practices and decision making, and possibly affect economic development,” the researchers say.
In Mozambique, that means less cash stuck in limbo and more of it fueling long-term growth.
Explore the different modules in the course in the infographic below: