A classical approach to collecting and elaborating information to make entrepreneurial decisions combines search heuristics such as trial and error, effectuation, and confirmatory search. This paper develops a framework for exploring the implications of a more scientific approach to entrepreneurial decision making. The panel sample of our randomized control trial includes 116 Italian startups and 16 data points over a period of about one year.
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.
Increasing evidence indicates the importance of management in determining firms’ productivity. Yet, causal evidence regarding the effectiveness of management practices is scarce, especially for high-skilled workers in the developed world. In an eight-month field experiment measuring the productivity of captains in the commercial aviation sector, we test four distinct management practices: (i) performance monitoring; (ii) performance feedback; (iii) target setting; and (iv) pro-social incentives.
What is the effect of exposing motivated youth to firm management in practice? To answer this question, we place young professionals for one month in established firms to shadow middle managers. Using random assignment into program participation, we find positive average effects on wage employment, but no average effect on the likelihood of self-employment. Within the treatment group, we match individuals and firms in batches using a deferred-acceptance algorithm. We show how this allows us to identify heterogeneous treatment effects by firm and intern.
Individual-level opportunity recognition processes are vital to corporate entrepreneurship. However, little is known regarding how managerial communication impacts the effectiveness of idea suggestion systems in stimulating individuals' participation in intrapreneurial ideation. Integrating self-determination theory, creativity, and framing research, we theorize how different ways of inviting employees to submit proposals (opt-out/opt-in registration; provision of examples) affect the number and quality of submitted ideas.
A randomized control trial with 945 entrepreneurs in Jamaica shows positive shortterm impacts of soft-skills training on business outcomes. The effects are concentrated among men, and disappear twelve months after the training. We argue that the main channel is increased adoption of recommended business practices, exclusively observed in the short run. We see persistent effects on an incentivized behavioral measure of perseverance after setbacks, a focus of this training.
This paper studies the impact of a financial education program for top managers of medium and large enterprises in Mozambique through a randomized controlled trial (RCT). We use survey data and financial reporting data to show consistent evidence that managers adjust some financial policies in response to the education program. The largest treatment effects are on short-term financial policies related to working capital, generating a positive impact on cash flows due to reductions in account receivables and inventories.
Effects of relative pay on effort and labour supply are being examined in the context of an Indian manufacturing plant where co-workers' wages are exogenously varied. Results forthcoming.
Differences in management quality are an important contributor to productivity differences across countries. A key question is then how to best improve poor management in developing countries. We test two different approaches to improving management in Colombian auto parts firms. The first uses intensive and expensive one-on-one consulting, while the second draws on agricultural extension approaches to provide consulting to small groups of firms at approximately one-third of the cost of the individual approach.
This paper studies whether small-scale businesses can learn and adopt protable practices of their successful peers. We identify such practices through a detailed business survey in urban Indonesia and disseminate the information to a randomly selected sample of small retailers through a professionally developed handbook. An orthogonal subgroup is provided additional support through business role models, and another through individualized business counseling. We find a significant increase in the adoption of profitable practices in all sub-groups of retailers.
This paper examines the impact of improvements in marketing skills relative to finance skills among small-scale entrepreneurs. It addresses three important questions: (1) What is the impact of marketing or finance skills on business profits? (2) How do improvements in marketing and finance skills respectively affect different business outcomes? (3) When are increases in marketing relative to finance skills more beneficial?
While management styles and practices have been found to be important determinants of firm performance, there is far less evidence on the extent to which management matters for entrepreneurial ventures and whether founders can learn to be more effective managers.
A business networking programme on firm performance in China, and how groups composition and meeting frequency can facilitate trust and information flows. Results forthcoming.
We employ a discrete choice experiment in the employment process for a national call center to estimate the willingness to pay distribution for alternative work arrangements relative to traditional office positions. Most workers are not willing to pay for scheduling flexibility, though a tail of workers with high valuations allows for sizable compensating differentials. The average worker is willing to give up 20 percent of wages to avoid a schedule set by an employer on short notice, and 8 percent for the option to work from home.
In the context of a basic, short-term data entry job, unannounced provision of public recognition to employees yielded an economically significant increase in performance. Results suggest that recognition works best when it is provided exclusively, but not too exclusively. The performance increases in exclusive recognition are mainly driven by strong positive responses of non-recipients, which is most likely due to conformity preferences.
Examines the effectiveness of a specific management production routine relying on knowledge transfer of managers in a Bangladeshi garment factory. Results forthcoming.
Can internship programmes provide young entrepreneurs with valuable experiential learning on successful management practices? This pilot study confirms the viability of such a programme in promoting 'learning by doing', and builds the foundation for a full-scale internship experiment beginning in 2015.
The Growth Impact Pilot, launched in April 2014, is a research project on the impact of business advice (coaching), supported by the UK Government. The Growth Impact Pilot will assess whether the provision of Growth Accelerator coaching is the reason why firms on the service achieve high rates of growth, or whether this growth would have happened anyway. It is designed to assess the impact of coaching by comparing two groups:
Small businesses that seek and obtain strategic business advice are more likely to thrive and grow. Advice can increase productivity, drive sales and improve the chance of survival in tough economic times. Yet as many as three in every ten small businesses in the UK may have an unmet need for business advice . And to date, available evidence does not establish a causal link between business advice and higher growth for small businesses.
Programs targeting micro businesses have become increasingly common in developing countries, particularly because micro enterprises employ a substantial fraction of individuals in these economies (about 47 percent in Mexico) and because the majority of these micro enterprises tend to stay small and have low productivity Many programs aimed at fostering the growth of micro and small businesses have focused on providing credits or offering business and financial training, since access to credit and lack of managerial skills are believed to limit the success of this type of businesses (Bruhn e
A business skills training intervention for SME owners and managers in metro Manila, the Philippines. Results forthcoming.
We propose to implement and evaluate a soft-skills training program among mid- and upper-level managers in textile factories in India. The goal of the intervention and evaluation is to investigate constraints to firm performance due to managerial human capital, and to contribute to the understanding of how improved management can translate into better working conditions for workers. We will evaluate this program through a multi-step randomized controlled trial in 41 factories operated by a large textile firm based in Bangalore, India.
An online platform for contract enforcement in the Peruvian textile sector. Results forthcoming.
An intervention that allowed randomly selected employees in a Chinese travel agency call centre to work from home appeared to have significant positive effects on worker performance.
Evaluation of a training and consulting program for managerial staff in Bangladeshi garment factories to understand how new management practices are adopted and implemented and what determines their success.
Self-control problems change the logic of agency theory by partly aligning the interests of the firm and worker: both now value contracts that elicit future effort. Findings from a year-long field experiment with full-time data entry workers support this idea. First, workers increase output by voluntarily choosing dominated contracts (which penalize low output but give no additional rewards for high output). Second, effort increases closer to (randomly assigned) paydays.
Evaluating a specific training program for youth in Uganda, recently graduated from secondary shool, aimed at identifying the differential importance of "hard" and "soft" skills. Results forthcoming.
Examines the differential impacts of group management consulting versus individualised management consulting on firm performace in Colombia, and whether management practices are partially responsible for the gap in firm productivity in developing countries. Results forthcoming.
This paper explores the effectiveness of goal setting and accountability within group-based entrepreneurship initiatives in creating human capital. The study uses a randomized cluster trial to compare the experimental and control groups of entrepreneurs. The results suggest that frequent goal setting and accountability in group settings provides a greater number of learning experiences and human capital development opportunities available to entrepreneurs than those that did not engage in the same level of goal setting.
This meta-analysis of field experimental evidence on firm-employee relationships finds strong evidence that financial incentive increase output, and that non-financial approaches and social relations also have important impacts. However, many important topics have not been studied yet using field experiments, including recruiting, worker promotion, and training.