Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from...

51
Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton 1 Julius R ¨ uschenp ¨ ohler 2 Burak Uras 1 and Bilal Zia 3 1 Tilburg University 2 CEGA, UC Berkeley 3 The World Bank This project has been funded by the UK Department for International Development (DFID)(EIP-LIC/PO5639) Glasgow University, Centre for Development Studies Guest Lecture 7 March 2019 Dalton, R ¨ uschenp ¨ ohler, Uras, and Zia Best Practices from Peers 7 March 2019 1 / 50

Transcript of Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from...

Page 1: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Learning Best Practices from PeersExperimental Evidence from Small-scale Retailers in an Emerging Market

Patricio S. Dalton1 Julius Ruschenpohler2 Burak Uras1

and Bilal Zia3

1Tilburg University

2CEGA, UC Berkeley

3The World Bank

This project has been funded by the UK Department for International Development (DFID)(EIP-LIC/PO5639)

Glasgow University, Centre for Development Studies Guest Lecture

7 March 2019Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 1 / 50

Page 2: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Background

Micro & Small firms (MSEs) is the main source of employment indeveloping world.

For instance in Indonesia: MSEs represent 99% of all firms and 94.5% ofemployment (Ministry of Cooperatives and SMEs Indonesia, 2011).

→ Fostering MSE growth is an important development policy goal.

MSMEs in developing countries face different constraints to grow:I Financial (e.g., credit: Banerjee et al., 2015; savings: Dupas et al., 2016)I Managerial knowledge and skills (Fernandes et al., 2014; Miller et al., 2015;

McKenzie and Woodruff, 2017; Anderson, Chandy, and Zia, 2017)

→ This paper: fostering business knowledge and skills (practices), whereevidence of impact has been mixed (McKenzie and Woodruff, 2017).

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 2 / 50

Page 3: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Business PracticesBusiness practices are important for firm productivity.

I Medium and large firms: Bloom and Van Reenen (2007), Bloom et al. (2013).I Small firms: McKenzie and Woodruff (2017), Anderson, Chandy, and Zia

(2017)→ Business practices could explain firm productivity differences andmacro outcomes:

I Foster et al. (2008), Hsieh and Klenow (2009), Bartelsman et al. (2013)

Heterogeneity of businesses practices used within and between firms.

Business training programs offer formal and standardized coursesdeveloped in the Western world.

Small and statistically insignificant effects on MSEs in developing world(McKenzie and Woodruff (2014 & 2017)):

I Business practicesI Sales and Profits

Perhaps standard business training is not what firms need?

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 3 / 50

Page 4: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Best Practices From Peers in the Local Context

We propose an alternative to (formal) business training programs:

→ Make use of the local heterogeneity across businesses.→ Learn from successful local businesses about business practices thatare associated with high performance.→ Make these practices and adoption information common knowledgeto other businesses.

Advantages:I Low cost: For the policy maker and the beneficiary.I Relevant: We have contemporaneous evidence that the practices may work.I Idiosyncratic to the local context, habits, and norms.

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 4 / 50

Page 5: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Which information do we provide?

Our study design focuses on the provision of two types of information:

I Quantitative: Practices exhibiting strongest association with profits - basedon context-specific relevance ranking constructed from cross-sectionalanalysis at baseline.

I Qualitative: Detailed accounts of local customs and habits used bysuccessful peers to implement the businesses practices.

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 5 / 50

Page 6: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

How do we provide the information?

Handbook of best practicesI Information: Which practices, how to adopt, and why?

Topped up with two types of experiential learning interventions:

Successful business peers movieI Psychological and emotional involvement → social learning is possible

through observing the successful experience of similar others.I Bernard, et al. (2014); La Ferrara et al. (2012); Chong and La Ferrara (2009);

Berg and Zia (2013).

Personalized business practice implementation helpI Hands-on involvement → social learning is possible through own

experience, with a small nudge.I Bruhn, Karlan, and Schoar (2016); Carpena et al. (2017).

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 6 / 50

Page 7: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Our Research Questions

Local characterizationI Which practices are associated with high profits?I How do successful businesses implement them?

AdoptionI Do retailers adopt these practices once peer information is made common

knowledge?I If so, ...

F Does the type of experiential involvement matter?

ImpactI Does firm profitability increase?I If so, what are the channels?

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 7 / 50

Page 8: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Literature: Social Learning and Business Practices

Our research is the most relevant for the recent literature on mobilizingexperiences of peers in the local context to induce business growth:

I Cai an Szeidl (2018, QJE)I Fafchamps and Quinn (2018, WBER)I Lafortune et al. (2018, AEJ: Applied)

We differ from the existing studies in two important dimensions:1 Collect and aggregate detailed local information and then disseminate it

(anonymity of business owners is preserved).2 Without direct contact of business owners.

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 8 / 50

Page 9: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Sampling and Randomization

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 9 / 50

Page 10: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Sample and Random Assignment

List of a random sample of 2042 small retail businesses, warungs.Random sub-sample of 1301 from the list

Selection criteria for firm listing:I At least 4m2 in sizeI At least two different product categories on offerI At least 30 meters distance to next business in sampleI Stable business premises, no franchises

Randomization to treatments arms stratified byI GenderI Firm space (4-6m2, 6-10m2, 10 and above m2)I Composite score of business practices above or below medianI Sub-District

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 10 / 50

Page 11: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Retailer

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 11 / 50

Page 12: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Retailer

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 12 / 50

Page 13: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Qualitative Interviews

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 13 / 50

Page 14: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Interventions

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 14 / 50

Page 15: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Treatments

Three types of information provision on knowledge and skills:I Handbook with top practicesI Movie with successful peersI Business practice implementation help

Five experimental groups1 Handbook only (N=260)2 Handbook and invitation to movie screening (N=260)3 Handbook and offer of two help visits (N=260)4 Handbook and both movie and help (N=260)5 Control (N=261)

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 15 / 50

Page 16: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Handbook

Figure: Best-practices handbook

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 16 / 50

Page 17: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Handbook: Type of Information

Profits associated with selected practices→ From cross-sectional analysis at baseline

Implementation guide→ Drawing on additional information from qualitative interviews

Exercise book to practice

Short guide with an overview of the practices and a summary of eachstep within each practice

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 17 / 50

Page 18: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Selection of Potentially Profitable Practices

Cross-sectional analysis at baseline

I Core set of business practices: McKenzie and Woodruff (2017).I We extend this set based on the results from qualitative interviews with 102

retailers, which was done before listing for baseline.F New business practices.F Learn about the idiosyncratic way of implementing the practices.F Select potential successful peers.

I Selection on observables

Yi1 = βPi1 + γXi1 + εi

F Yi1: 8 different proxies for firm performance (sales/profits, customers)F Pi1: Subsets of practices (e.g., marketing practices from M&W, 2017)F Xi1: Firm-level controls (e.g. firm size, number of employees)

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 18 / 50

Page 19: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Selection of Potentially Profitable Practices - II

Strongest association with performance→ Cut-off: Regressor significant in at least 6 of the 8 specifications

Largest effect sizes→ Cut-off: Highest 25th percentile in distribution of all effect sizes

Number of Adoption effect size Handbook

Specifications Monthly sales Monthly profits Returns to Mention

Significant (Comp, IHS) (Comp, IHS) adoption

Record-Keeping

Keeps Written Business Records R1 7 0.283 0.259 X X

Keeps Collection of Loose Receipts Radd2 7 0.189 0.215

...

...

Records Salaries and Other Costs Radd12 0 -0.007 -0.007

Records Outstanding Payments by Customers Radd13 7 0.401 0.361 X X

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 19 / 50

Page 20: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Which Practices were Potentially Profitable?

Selected “local best practices”

I MarketingF e.g., “Offer price discounts”F e.g., “Consulting former customers”

I Record KeepingF e.g., “Keep records of profits”

I Stocking UpF e.g., “Develop a fixed schedule for the purchase of the main products”F e.g., “Stock up daily rather than weekly”

I Financial PlanningF e.g., “Set monthly sales targets”

I Discussing Business Matters and Joint Decision-MakingF e.g., “Discuss business matters before making decisions?”

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 20 / 50

Page 21: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Handbook: Info on Practice-Profits Relations

Figure: Practice-Profits relationship information on specific practices

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 21 / 50

Page 22: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Handbook: Implementation Guidelines

Figure: Step-by-step guide to implementing specific practices as part of broaderpractice categories

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 22 / 50

Page 23: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Movie with Successful Peers

Figure: Movie screening

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 23 / 50

Page 24: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Movie with Successful Peers - II

How were the successful peers (role models) selected?I Qualitative interviews and quantitative baseline survey

→ Top 5 retailers selected to represent the local frontier in each of the Top 5practices - from 102 retailers interviewed before the baseline.

F We capture local ways of implementing best practices in a 24-minutes moviefeaturing these successful peers.

F We invite business owners to public movie screenings in local public facilities.F Screenings end with a presentation by trained local staff which ties the practices

back to the handbook.

→ Importantly: The practices presented in the movie cover the same topicspresented in the handbook.

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 24 / 50

Page 25: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Implementation Help for Business Practices

Figure: A facilitator explaining the record-keeping chapter in a help session

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 25 / 50

Page 26: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Implementation Help for Business Practices - II

Training of local staffI Extensive handbook studyI Background knowledge of small retail businesses in JakartaI Behavioral techniques to work with goals and commitments

Implementation help sessions (of 30-40 minutes each)I 1st session

F Ask entrepreneur which handbook practices they are most interested inimplementing

F Diagnose constraints to knowledge acquisition and practice implementationF Offer solutions derived from handbookF Set goals for next session to follow up on

I 2nd session (one to two weeks later)F Follow up on progress and diagnose constraintsF Offer solutions derived from handbookF Set goals for entrepreneur to progress individually

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 26 / 50

Page 27: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Sample Map

Figure: City-level representation of the final sample of 1301 retail businesses

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 27 / 50

Page 28: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Sample Map - II

Figure: District-level representation of a sub-sample

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 28 / 50

Page 29: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Summary of Research Timeline

1 September 2015: Qualitative Interviews (102)

2 January 2016: Listing for Baseline (2042 - excludes initial 102)

3 Feb-Apr 2016: Baseline Survey (1301)

4 Oct-Nov 2016: Interventions (1040)

5 Apr-May 2017: Midline (1301)

6 Apr-May 2018: Endline (1301)

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 29 / 50

Page 30: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Data

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 30 / 50

Page 31: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Summary Statistics

Control HB only HB & MOV HB & HELP HB & MOV& HELP

N = 261 N = 260 N = 260 N = 260 N = 260

Firm Owner CharacteristicsGender (Male=1) 0.28 0.3 0.29 0.3 0.28Age 45.22 45.27 45.28 45.16 45.38Education (Years) 9.1 9.52 9.36 9.42 9.55Risk Preference (0 - 10 “Perfectly Risk-Seeking”) 3.74 3.76 3.88 3.6 3.68Time Preference (0 - 10 “Perfect Patience”) 5.19 5.07 5.21 5.25 5.2

Firm CharacteristicsFirm Age (Years) 12.76 13.77 14.03 13.98 13.47Family Member Is Business Partner 0.56 0.6 0.63 0.59 0.62Total Number of Workers 2.03 2.05 1.9 1.99 2.04Business Has Tax ID 0.2 0.21 0.2 0.15 0.18Total Sales Last Month (USD PPP) 4454.37 4730.64 4840.55 4761.4 5139Total Profits Last Month (USD PPP) 889.58 961.1 926.78 825.25 934.66Applied for Bus Loan in Last 12 Months 0.2 0.17 0.15 0.22 0.17Obtained Bus Loan in Last 12 Months 0.18 0.15 0.14 0.18 0.14

Business PracticesManagement Practices Aggregate Score 0.37 0.36 0.37 0.35 0.37

Marketing Subscore 0.23 0.23 0.25 0.23 0.24Stocking-up Subscore 0.45 0.47 0.47 0.47 0.46Record-keeping Subscore 0.33 0.28 0.3 0.29 0.3Financial-planning Subscore 0.51 0.47 0.47 0.43 0.47

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 31 / 50

Page 32: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Sample Balance Across Interventions

HB only HB & MOV HB & HELP HB & MOV & HELP- Control - Control - Control - Control

(p-value) (p-value) (p-value) (p-value)

Firm owner characteristicsGender (Male=1) 0.611 0.825 0.68 0.867Age 0.959 0.951 0.951 0.866Education (Years) 0.185 0.446 0.327 0.174Risk Preference 0.902 0.451 0.453 0.739Time Preference 0.542 0.924 0.742 0.94

Firm characteristicsFirm Age 0.313 0.222 0.236 0.478Family Member Is Business Partner 0.447 0.116 0.561 0.165Total Number of Workers 0.837 0.218 0.708 0.919Business Has Tax ID 0.811 0.878 0.145 0.516Total Sales Last Month (USD PPP) 0.5 0.371 0.467 0.114Total Profits Last Month (USD PPP) 0.496 0.723 0.524 0.674Applied for Bus Loan in Last 12 Months 0.374 0.171 0.438 0.374Obtained Bus Loan in Last 12 Months 0.3 0.2 0.926 0.2

Business practicesManagement Practices Aggregate Score 0.372 0.973 0.33 0.958

Marketing Subscore 0.951 0.161 0.844 0.508Stocking-up Subscore 0.325 0.301 0.295 0.426Record-keeping Subscore 0.033** 0.134 0.067* 0.178Financial-planning Subscore 0.274 0.191 0.011** 0.254

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 32 / 50

Page 33: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Movie: Take Up and Assessment

(1) (2)HB & MOV HB & MOV

& HELP(A) (B)

N=260 N=260

AttendanceBusiness Owner or Partner Attended Film Screening 0.52 0.49

Evaluation (1-4 Scale):Has Learned Something New 3.34 3.21Feels Inspired 3.31 3.30Feels Hopeful 3.60 3.42Feels Bored 0.83 0.97

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 33 / 50

Page 34: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Help: Take Up and Assessment

(1) (2)HB & HELP HB & MOV,

& HELP(A) (B)

N=260 N=260

AttendanceBusiness Owner or Partner Attended 1st Session 0.77 0.78Business Owner or Partner Attended 2nd Session 0.68 0.68

Evaluation (1-4 Scale)Has Learned Something New 2.88 2.89Feels Inspired 2.76 2.83Feels Hopeful 2.88 2.97Feels Bored 0.59 0.43

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 34 / 50

Page 35: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Attrition

Completed Completed Business Closed Business ClosedMidline Endline Before Midline Before Endline

(1) (2) (3) (4)

Assigned Handbook -0.022 -0.035 0.011 0.005(0.024) (0.035) (0.020) (0.029)

Assigned Handbook & Movie -0.028 -0.008 -0.003 -0.003(0.025) (0.035) (0.019) (0.029)

Assigned Handbook & Help -0.021 -0.021 0.009 -0.001(0.024) (0.035) (0.020) (0.028)

Assigned All Three -0.034 -0.033 -0.005 -0.009(0.025) (0.035) (0.019) (0.028)

R-squared 0.032 0.043 0.034 0.043Sample Size 1301 1301 1301 1301Mean of Dependent Variable in Control Group 0.927 0.805 0.054 0.126F-tests (p-value):

Book = Book & Mov 0.822 0.452 0.499 0.805Book = Book & Help 0.982 0.702 0.947 0.843Book = All Three 0.642 0.952 0.444 0.643Book & Mov = Book & Help 0.803 0.708 0.540 0.960B & M + B & H > All Three 0.338 0.528 0.650 0.548

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 35 / 50

Page 36: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Outcome Analysis

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 36 / 50

Page 37: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Outcome Analysis: Intention-to-Treat Regressions

Estimate the ITT effect on a given outcome Y using the following ANCOVA:

Y2i = α +4

∑m=1

βmTmi + γX1i + δV + θM + ζY1i + εi

Y2i is the outcome for business i at midline and endline stacked uptogether.X is baseline stratification controls (gender, practice score, shop size).V represents village fixed effects, M is a dummy for midline surveyround.Y1i is the baseline value of the outcome of interest.Standard errors are clustered at the shop level across midline andendline.Coded missing control variables as zero and included dummy variablesto indicate missing values.

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 37 / 50

Page 38: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Business Practices: Record Keeping Outcomes

Rec-Keep Kept Record All Itemized EstimAgg Score Written Rec Purch & Sale Rev & Exp Cash on Hand

(1) (2) (3) (4) (5)

Assigned Handbook 0.009 -0.011 0.015 0.032 0.019(0.014) (0.008) (0.013) (0.029) (0.030)

Assigned Handbook & Movie 0.033** 0.000 0.029** 0.077*** 0.054*(0.014) (0.005) (0.014) (0.029) (0.031)

Assigned Handbook & Help 0.033** 0.001 0.026* 0.081*** 0.070**(0.014) (0.005) (0.014) (0.030) (0.031)

Assigned All Three 0.032** 0.006 0.016 0.082*** 0.051*(0.014) (0.004) (0.014) (0.030) (0.030)

Stratification Controls Yes Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes Yes YesR-squared 0.205 0.034 0.112 0.142 0.127Sample Size 2205 2204 2204 2205 2204Dependent Variable Mean of Control 0.385 0.993 0.035 0.230 0.323Dependent Variable SD of Control 0.212 0.081 0.185 0.421 0.468F-tests (p-value):

Book = Book & Mov 0.112 0.148 0.335 0.139 0.248Book = Book & Help 0.107 0.090 0.428 0.117 0.105Book = All Three 0.134 0.010 0.927 0.105 0.278Book & Mov = Book & Help 0.993 0.927 0.858 0.894 0.623Book & Mov = All Three 0.949 0.147 0.402 0.866 0.917

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 38 / 50

Page 39: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Business Practices: Financial Planning Outcomes

Planning Review Fin Perf Anticipated Budget CompAgg Score To Iden Improv For Upcoming Costs Target vs. Act Sales

(1) (2) (3) (4)

Assigned Handbook 0.027 0.007 0.037 0.034(0.022) (0.033) (0.023) (0.035)

Assigned Handbook & Movie 0.043** 0.035 0.037 0.052(0.021) (0.033) (0.023) (0.034)

Assigned Handbook & Help 0.034* 0.041 0.040* 0.015(0.021) (0.032) (0.023) (0.033)

Assigned All Three 0.068*** 0.065** 0.056** 0.081**(0.022) (0.032) (0.023) (0.034)

Stratification Controls Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes YesR-squared 0.192 0.106 0.185 0.130Sample Size 2204 2204 2204 2204Dependent Variable Mean of Control 0.402 0.642 0.146 0.418Dependent Variable SD of Control 0.310 0.480 0.354 0.494F-tests (p-value):

Book = Book & Mov 0.487 0.396 0.971 0.613Book = Book & Help 0.754 0.298 0.918 0.578Book = All Three 0.073 0.074 0.445 0.180Book & Mov = Book & Help 0.675 0.869 0.887 0.277Book & Mov = All Three 0.245 0.359 0.413 0.402

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 39 / 50

Page 40: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Business Practices: Marketing Outcomes

Marketing Consulted Discounts Special OfferedAgg Score Former Cust To Loyal Cust Sale-Offers New-Product

(1) (2) (3) (4) (5)

Assigned Handbook -0.008 0.007 -0.027 -0.002 -0.010(0.017) (0.024) (0.032) (0.022) (0.033)

Assigned Handbook & Movie 0.029 0.042 0.041 0.039 0.016(0.018) (0.026) (0.034) (0.024) (0.033)

Assigned Handbook & Help 0.032* 0.026 0.055 0.017 0.041(0.018) (0.025) (0.034) (0.022) (0.033)

Assigned All Three 0.040** 0.057** 0.067** 0.034 0.018(0.019) (0.027) (0.034) (0.023) (0.033)

Stratification Controls Yes Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes Yes YesR-squared 0.217 0.098 0.144 0.093 0.118Sample Size 2205 2204 2205 2204 2205Dependent Variable Mean of Control 0.309 0.142 0.358 0.111 0.624Dependent Variable SD of Control 0.262 0.349 0.480 0.314 0.485F-tests (p-value):

Book = Book & Mov 0.045 0.197 0.041 0.097 0.434Book = Book & Help 0.021 0.468 0.014 0.401 0.117Book = All Three 0.009 0.070 0.005 0.131 0.385Book & Mov = Book & Help 0.834 0.570 0.703 0.385 0.443Book & Mov = All Three 0.542 0.614 0.461 0.836 0.945

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 40 / 50

Page 41: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Business Practices: Stock-Up Outcomes

Stock-Up Top-Products Adj Stock Neg Low Comp P & QAgg Score Alw in Stock Based Prof P w/ Supp Across Supp

(1) (2) (3) (4) (5)

Assigned Handbook -0.007 0.031 -0.001 -0.008 -0.044(0.019) (0.029) (0.033) (0.028) (0.034)

Assigned Handbook & Movie 0.038* 0.066** 0.039 0.018 0.037(0.020) (0.028) (0.034) (0.029) (0.035)

Assigned Handbook & Help 0.011 0.026 -0.010 0.041 0.007(0.019) (0.028) (0.034) (0.029) (0.034)

Assigned All Three 0.053*** 0.041 0.091*** 0.055* 0.038(0.019) (0.029) (0.034) (0.029) (0.034)

Stratification Controls Yes Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes Yes YesR-squared 0.187 0.054 0.111 0.108 0.153Sample Size 2205 2205 2205 2204 2204Dependent Variable Mean of Control 0.471 0.770 0.420 0.195 0.500Dependent Variable SD of Control 0.270 0.421 0.494 0.396 0.501F-tests (p-value):

Book = Book & Mov 0.014 0.198 0.226 0.350 0.018Book = Book & Help 0.304 0.862 0.785 0.084 0.125Book = All Three 0.001 0.720 0.007 0.025 0.013Book & Mov = Book & Help 0.150 0.130 0.144 0.446 0.372Book & Mov = All Three 0.405 0.348 0.130 0.210 0.965

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 41 / 50

Page 42: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Business Practices: Discussion Outcomes

Discussed Discussed Made Joint Drafted AgreementBus w/ Family Bus w/ Non-Family Bus Decisions For Joint-Decisions

(1) (2) (3) (4)

Assigned Handbook -0.012 -0.036 0.024 -0.001(0.034) (0.026) (0.031) (0.027)

Assigned Handbook & Movie 0.039 -0.024 0.038 0.041(0.032) (0.026) (0.031) (0.028)

Assigned Handbook & Help 0.072** -0.034 0.039 0.035(0.032) (0.026) (0.031) (0.027)

Assigned All Three 0.030 -0.017 0.068** 0.051*(0.033) (0.026) (0.030) (0.028)

Stratification Controls Yes Yes Yes YesControl for Baseline Level of Outcome Yes Yes Yes YesMidline Survey Dummy Yes Yes Yes YesR-squared 0.085 0.068 0.126 0.107Sample Size 2205 2205 2205 2205Dependent Variable Mean of Control 0.617 0.192 0.310 0.228Dependent Variable SD of Control 0.487 0.395 0.463 0.420F-tests (p-value):

Book = Book & Mov 0.133 0.640 0.640 0.124Book = Book & Help 0.011 0.937 0.628 0.172Book = All Three 0.229 0.462 0.148 0.058Book & Mov = Book & Help 0.291 0.703 0.980 0.826Book & Mov = All Three 0.793 0.784 0.321 0.737

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 42 / 50

Page 43: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Business Practices Not Covered in Treatments

Practices not covered in treatments but measured in baseline, midline,and endline did not get significantly influenced by our interventions. Forinstance:

I Observed Products for Sale at Competing BusinessI Asked Suppliers about High Demand ProductsI Advertised the BusinessI Identified Profit Contribution of Best ProductsI Kept Annual Profit and Loss StatementI Kept Annual Cash Flow StatementI Kept Annual Balance SheetI Kept Annual Income and Expenses Statement

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 43 / 50

Page 44: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Business ProfitsProfits Profits

last month last month(win 5%) (IHS)

(1) (2)

Assigned Handbook -91.307 -0.067(78.400) (0.088)

Assigned Handbook & Movie 110.378 0.055(86.841) (0.092)

Assigned Handbook & Help 310.455*** 0.261***(89.488) (0.096)

Assigned All Three 191.088** 0.199**(84.662) (0.094)

Stratification Controls Yes YesControl for Baseline Level of Outcome Yes YesMidline Survey Dummy Yes YesR-squared 0.179 0.211Sample Size 2172 2172Dependent Variable Mean in Control Group 894.544 6.817Dependent Variable SD in Control Group 1127.783 1.348F-tests (p-value):

Book = Book & Mov 0.020 0.167Book = Book & Help 0.000 0.000Book = All Three 0.001 0.003Book & Mov = Book & Help 0.038 0.035Book & Mov = All Three 0.382 0.129

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 44 / 50

Page 45: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Business SalesSales Sales

last month last month(win 5%) (log)

(1) (2)

Assigned Handbook -396.976 -0.102(314.252) (0.069)

Assigned Handbook & Movie 335.489 0.023(337.881) (0.077)

Assigned Handbook & Help 836.755** 0.123(372.924) (0.079)

Assigned All Three 807.462** 0.142*(358.384) (0.075)

Stratification Controls Yes YesControl for Baseline Level of Outcome Yes YesMidline Survey Dummy Yes YesR-squared 0.492 0.431Sample Size 2197 2197Dependent Variable Mean in Control Group 4998.923 7.965Dependent Variable SD in Control Group 5623.257 1.190F-tests (p-value):

Book = Book & Mov 0.020 0.087Book = Book & Help 0.000 0.003Book = All Three 0.000 0.001Book & Mov = Book & Help 0.171 0.224Book & Mov = All Three 0.188 0.128

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 45 / 50

Page 46: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Objective Measures

Shop is Shop is Prices areClean & Tidy Well-Stocked Clearly Marked

(1) (2) (3)

Assigned Handbook -0.016 0.017 0.037(0.026) (0.030) (0.025)

Assigned Handbook & Movie -0.029 0.070** 0.052**(0.027) (0.029) (0.025)

Assigned Handbook & Help -0.031 0.029 0.043*(0.027) (0.030) (0.025)

Assigned All Three -0.015 0.024 0.034(0.027) (0.031) (0.024)

Stratification Controls Yes Yes YesControl for Baseline Level of Outcome Yes Yes YesMidline Survey Dummy Yes Yes YesR-squared 0.148 0.119 0.065Sample Size 2204 2204 2204Dependent Variable Mean of Control 0.673 0.695 0.144Dependent Variable SD of Control 0.470 0.461 0.351F-tests (p-value): 0.616 0.071 0.566

Book = Book & MovBook = Book & Help 0.570 0.686 0.832Book = All Three 0.979 0.830 0.887Book & Mov = Book & Help 0.955 0.169 0.716Book & Mov = All Three 0.611 0.118 0.466

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 46 / 50

Page 47: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Expenses, Customers and Employment

We find no significant impact of treatments on:I Total Business ExpensesI Number of Customers

There is a marginally significant impact (at 10% level) of HB+Help on:I Total Number of Employees (6% ↑ wrt Control)I Total Number of Family Employees (6% ↑ wrt Control)

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 47 / 50

Page 48: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Mechanisms

Monthly profits ↑ by 35% wrt Control (=USD 310 or 0.28 sd increase) forHB+Help and by 21% wrt Control (=USD 190 or 0.17 sd increase) for AllThree.

Monthly sales ↑ by 17% (0.15 sd increase) wrt Control for HB+Help andAll Three.

= expenses

= number of customers

Efficiency gains from managing better the business (more efficientstock-up, marketing, planning, etc)

Note 1: Effects are long-term (and likely to be permanent) - as the resultsare from a midline (6 months) and an endline (18 months).Note 2: One reason for larger significance with Help relative to Movie istake-up (77% vs 50%). With ToT coefficient estimates for Movie scale up,but also the SEs - so we don’t get significance.

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 48 / 50

Page 49: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Cost-Effectiveness

Low cost per firm:I Cost Handbook alone: USD 100I Cost Handbook & Movie: USD 125I Cost Handbook & Help: USD 125I Cost Handbook & Help & Movie: USD 150

High BenefitsI Up to USD 330 per month in profits.I Adoption of top practices by retailers.

Research Design scalable and replicable in other settings.

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 49 / 50

Page 50: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Takeaways

It is possible to create behavioral changes and substantial small-firmgrowth with very low-cost interventions.

Peer information alone is not enough for social learning.

Need to see successful peers implementing the practice, or to implementthe practice with some little help.

No need of formal business education nor to organize businesses’owners personal meetings

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 50 / 50

Page 51: Learning Best Practices from Peers · Learning Best Practices from Peers Experimental Evidence from Small-scale Retailers in an Emerging Market Patricio S. Dalton1 Julius Ruschenp¨

Many thanks for the invitation! [email protected]

Dalton, Ruschenpohler, Uras, and Zia Best Practices from Peers 7 March 2019 50 / 50