User entrepreneurs are responsible for the most important innovations in many industries, but little research has explored the performance of firms founded by user entrepreneurs. While user entrepreneurs have a deep knowledge of customer needs that facilitates the identification of innovative solutions, they tend to lack the relevant business knowledge (e.g., market, production, operational and organizational) to successfully exploit opportunities and grow their ventures.
IGL Trials Database
IGL curates a database with randomised controlled trials in the field of innovation, entrepreneurship and growth. Browse our list of topics, see it as a map, or use the search function below.
2019
In this paper, meager jointly estimates the average effect and the heterogeneity in effects across seven studies using Bayesian hierarchical models.
2017
In the context of rug-making in Egypt, the opportunity to export provides evidence that learning-by-exporting occurs, and can lead to production quality and cost improvements.
2017
Accredited investors finance more than 75,000 U.S. startups annually. We explain how training aspiring entrepreneurs to pitch their new business ideas to these investors affects their odds of continued funding discussions. We model accredited investors’ decision to continue investigation as a real option whose value is a function of their experience and the information contained in the entrepreneurs’ pitches. We derive four hypotheses from the model, which we test through a field experiment that randomly assigns pitch training at four elevator pitch competitions.
2017
Using a randomized control trial, we evaluated the effect of a financial literacy program on the level of debt and on formal access to credit in Chile. We use a sample of beneficiaries of a publicly run micro-entrepreneurship program. We evaluated the program using administrative data with information on the debt level, interest rates, and new loans provided by the formal sector. The program tends to decreased debt level in the short run while increasing the probability of having formal debt.
2017
This study presents results from a randomized evaluation of two labor market interventions targeted to young women aged 18 to 19 years in three of Nairobi's poorest neighborhoods. One treatment offered participants a bundled intervention designed to simultaneously relieve credit and human capital constraints; a second treatment provided women with an unrestricted cash grant, but no training or other support.
2017
Can improved access to credit jump-start microenterprise growth? We examine subjects in urban Hyderabad, India, six years after microfinance–an intervention commonly believed to lower the cost of credit and spark business creation–was randomly introduced to a subset of neighborhoods. We find large benefits both in business scale and performance from giving “gung-ho entrepreneurs” (GEs)–those who started a business before microfinance entered–more access to microfinance. Notably, these effects persist two years after microfinance was withdrawn from Hyderabad.
2017
It is well-established that the effectiveness of pay-for-performance (PfP) schemes depends on employee- and organization-specific factors. However, less is known about the role of external forces. Investigating the role of market competition on the effectiveness of PfP, we theorize that there are two counteracting effects – business stealing and competitor response – that jointly generate an inverted U-shape relationship between PfP effectiveness and competition.
2017
Almost all firms in developing countries have fewer than ten workers, with a modal size of one. Are there potential high-growth entrepreneurs, and can public policy help identify them and facilitate their growth? A large-scale national business plan competition in Nigeria provides evidence on these questions. Random assignment of US$34 million in grants provided each winner with approximately US$50,000.
2016
I use a field experiment in rural Kenya to study how temporary incentives to save impact long run economic outcomes. Study participants randomly selected to receive large temporary interest rates on an individual bank account had significantly more income and assets 2.5 years after the interest rates expired. These changes are much larger than the short-run impacts on experimental bank account use and almost entirely driven by growth in entrepreneurship.
2015
By randomising the information sent to potential investors on AngelList over e-mail, this experiment finds evidence that the founding team of a startup has strong influence over the investor's decision to invest.
2015
The Good Exporting Practices program in Argentina aims to increase the success in the foreign markets of small and medium enterprises (SMEs) through supporting better practices in 7 core areas: i) strategy, ii) identification and segmentation of markets, iii) design and adaptation of the product, iv) production, v) communication, vi) distribution, and vii) administration. The Good Exporting Practices program targets firms that produce differentiated food products in various geographical regions in Argentina.
2015
The income flows of micro and small business owners in developing countries are usually quite irregular and hard to predict. Microloans by microfinance institutions (MFIs) from around the developing world generally follow very rigid repayment schedules beginning immediately after the loan disbursement. Such repayment structures are unfit to support investments in technology or other solutions to expand the business, as these generally take longer to pay off.
2015
While small and medium enterprises (SMEs) represent a large segment of activity and employment, there has been little research on how their growth is affected by financial constraints. Indeed, because the credit needs of SMEs are too big for microfinance products, but that they lack the collateral to borrow from the traditional banking sector, SMEs are in some way the “missing middle” of credit constraint research. This project addresses this evidence gap by evaluating the impact of a new loan product, designed specifically for SMEs, on firm growth and other market outcomes.
2015
In this meta-analysis what particularly stands out is the effect of microcredit on female empowerment. With respect to entrepreneurship and economic development outcomes, microcredit appears to have the most value in deprived contexts, but overall, results are highly dependent on context.
2015
Firms may face short term barriers when deciding to become exporters. Their production costs may be too high to compete with international prices, or they may perceive quality standard testing to be too risky of an investment. At the same time, the Tunisian government is keen to see more firms become exporters, tapping into international markets for further growth. The government wishes to see its firms produce higher value-added goods.
2015
This on-going project explores how much market protection patents provide. This is being tested in a randomized control trial, where a partner company is abandoning or maintaining patent protection based on whether that patent is in the treatment or control group. We are then analyzing market outcomes for the related products.
2015
Matching grants are one of the most common types of private sector development programs used in developing countries. But government subsidies to private firms can be controversial. A key question is that of additionality: do these programs get firms to undertake innovative activities that they would not otherwise do, or merely subsidize activities that would take place anyway? Randomized controlled trials can provide the counterfactual needed to answer this question, but efforts to experiment with matching grant programs have often failed.
2015
Crowdfunding is a recent and rapidly growing method of raising funds for early-stage companies. It minimises the cost and effort involved in raising start-up funds compared to traditional equity funding methods such as venture capital investment. Very little systematic, non-survey research has been conducted into these methods of funding new ventures, however. ‘The wisdom of crowds in equity crowdfunding’ aims to fill this gap.
2015
A loan programme for SMEs in the Philippines. Results forthcoming.
2015
This RCT will pilot Self-Accelerated Startups (SAS), a new peer-selection based entrepreneurship support model for idea-stage companies and student startups that uses collective bootstrapping on the lines of self-help groups in the social sector. In this model, prospective entrepreneurs meet regularly in groups for a pre-defined mentorship period and make small monthly contributions to a “seed fund”. At the end of this phase, the self-mobilized corpus is awarded as startup capital to one or two members by the rest of the peer group in return for equity in these startups.
2015
In the context of SME's in Colombia, researchers are evaluating the impact on firm performance of a legal reform which will provide a framework for the use and enforcement of movable collateral. Results forthcoming.
2015
Microentrepreneurs in developing countries face complex financial management challenges. Many entrepreneurs do not have the financial skills to address these challenges and traditional classroom-based financial training has not been shown effective in changing behavior or improving financial outcomes. What is the most effective way to equip microentrepreneurs with the necessary skills to address their financial management challenges? Traditional financial education curricula have shown very mixed results for improving knowledge and financial practices among microentrepreneurs.
2015
This paper examines the persuasiveness of delivery in start-up pitches.
2014
Micro-entrepreneurs often lack the financial literacy required to make important financial decisions. We conducted a randomized evaluation with a bank in the Dominican Republic to compare the impact of two distinct programs: standard accounting training versus a simplified, rule-of-thumb training that taught basic financial heuristics. The rule-of-thumb training significantly improved firms' financial practices, objective reporting quality, and revenues.
2014
This trial focuses on micro-enterprises in Kenya which have low productivity, surveying firms weekly about lost sales.
2013
Does limited access to formal savings services impede business growth in poor countries? To shed light on this question, we randomized access to noninterest-bearing bank accounts among two types of self-employed individuals in rural Kenya: market vendors (who are mostly women) and men working as bicycle taxi drivers. Despite large withdrawal fees, a substantial share of market women used the accounts, were able to save more, and increased their productive investment and private expenditures. We see no impact for bicycle taxi drivers.
2013
This experiment provides direct evidence on how information technologies can lead to the decentralisation of decision-making processes within organisations, and how IT solutions may represent an effective and low-cost alternative to steepening or increasing monetary incentives. Providing credit scores increased the effort committees put into solving more difficult problems, increased committees' overall output, and reduced the need for higher-level manager involvement in the decision-making process.
2009
In the context of farming in Malawi, reducing risk did not induce an increase in demand for credit, contrary to theoretical predictions. These results highlight the difficulties in mitigating environmental risks to poor farmers and to increase investments in better technologies.
2008
In the context of microfinance in Sri Lanka, high variance in returns may limit the willingness of banks to lend to microenterprises, but it remains a puzzle why incremental growth and reinvestment remains such a challenges as many firms have exhibited a high level of returns.