Using a randomized experiment in Chile we study the impact role models have in the context of a training program for micro-entrepreneurs. We show that being in a group randomly chosen to be visited by a successful alumnus of the program increases household income one year after, mostly due to increased business participation and business income.
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.
We construct a model of technology adoption with agents differing on two dimensions: their cognitive ability and their receptiveness to advice. While cognitive ability unambiguously speeds adoption, receptiveness to advice may speed adoption for individuals with low cognitive ability, but slow adoption for individuals with high cognitive ability. We conduct economic experiments measuring US farmers' cognitive ability and receptiveness to advice and examine how these characteristics impact their speed of adoption of genetically modified (GM) corn seeds.
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.
Existing theories and empirical research on how innovation occurs largely assume that innovativeness is an inherent characteristic of the individual and that people with this innate ability select into jobs that require it. In this paper, we investigate whether people who do not self-select into being innovators can be induced to innovate, and whether they innovate differently than those who do self-select into innovating.
Financial models assume startups learn from feedback, but it is hard to test it empirically. First, because demand and supply of information are endogenous. Second, because business education and acceleration bundle feedback with confounding treatments. This paper is the first randomized experiment testing how unsolicited written feedback impacts fundraising of high-stakes entrepreneurs. All 88 teams entered a global accelerator and received $40,000. A random half of them additionally received feedback to business-plans.
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.
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.
A business networking programme on firm performance in China, and how groups composition and meeting frequency can facilitate trust and information flows. Results forthcoming.
How do different sources of social influence impact the likelihood of entrepreneurship? Using a longitudinal field experiment with a pre-test/post-test design, random assignment to an entrepreneur mentor of a student increases the likelihood of entrepreneurial careers, particularly for students whose parents were not entrepreneurs.
In October 2014, all 4,494 undergraduates at the Massachusetts Institute of Technology were given access to Bitcoin, a decentralized digital currency. As a unique feature of the experiment, students who would generally adopt first were placed in a situation where many of their peers received access to the technology before them, and they then had to decide whether to continue to invest in this digital currency or exit. Our results suggest that when natural early adopters are delayed relative to their peers, they are more likely to reject the technology.
Standard business training programs aim to boost the incomes of the millions of self-employed business owners in developing countries by teaching basic financial and marketing practices, yet the impacts of such programs are mixed
This paper explores whether the advice entrepreneurs receive about people management influences their firm's performance.
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.
We present novel evidence from the results of a randomized controlled trial on the role that information plays in the perceptions of the benefits and costs of exporting. We first present results from a baseline survey of approximately 1,000 UK manufacturing firms to show that non-exporters hold substantially more negative beliefs about the costs and benefits of exporting relative to exporters.
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.
This paper explores the relationship between cognitive abilities and team performance in a start-up setting in a field experiment in which 573 students in 49 teams started up and managed real companies. Performance in this setting hinges on three tasks: opportunity recognition, problem solving, and implementation. Cognitive ability at the individual level has a positive effect on opportunity recognition and problem solving but no clear effect on implementation.
This paper investigates whether social identity considerations and norms may be driving occupational choices by women.
We report results of a natural field experiment conducted at a medical organization that sought contribution of public goods (i.e., projects for organizational improvement) from its 1200 employees. Offering a prize for winning submissions boosted participation by 85 percent without affecting the quality of the submissions. The effect was consistent across gender and job type. We posit that the allure of a prize, in combination with mission-oriented preferences, drove participation.
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.
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.
Search costs continue to powerfully shape (and limit) the formation of collaborations between scientists. Formation of collaborations appears
to be highly sensitive to information-rich face-to-face interactions, which existing communications technologies may not sufficiently substitute.
U.S. intellectual property law is firmly rooted in utilitarian principles. Copyright law is viewed as a means to give proper monetary incentives to authors for their creative effort. Many European copyright systems pursue additional goals: Authors have the right to be named as author, to control alterations and to retract their work in case their artistic beliefs have changed. Protecting these “moral rights” might be justified by the preferences of typical authors.
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.
Entrepreneurial activity is an important source of innovation in information technology products and services. Prior literature suggests that IT innovators should be agile, adaptive, willing to change direction frequently, and acquiring the necessary resources to facilitate the change. Social networks have been suggested as essential for acquiring information and resources and therefore in facilitating the venture development process.
For young firms, the effect of business training on hiring a first employee remains ambiguous, and more research is needed to understand the relationships behind job creation by entrepreneurs.
A 5-day enterprise training programme for women in Kenya. Results forthcoming.
This article studies technology adoption in a cluster of soccer-ball producers in Sialkot, Pakistan. We invented a new cutting technology that reduces waste of the primary raw material and gave the technology to a random subset of producers. Despite the clear net benefits for nearly all firms, after 15 months take-up remained puzzlingly low.
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.
This paper focuses on the evaluation of frontier scientific research projects and argues that the intellectual distance between the knowledge embodied in research proposals and an evaluator's own expertise systematically relates to the evaluations given.
We use two sequential RCTs to study the impact of a twice-executed six-month intensive training program costing about 12,000 euros per participant to encourage social entrepreneurship among youth. The first year training effort provided no robust treatment effects. Results were used to redesign and improve the training. The second year effort provided treatment effects on venture actions, venture creation, one leadership characteristic, one non-cognitive skill, and on subsequent work experience in startups.