Please use this form to submit your study for inclusion into our database. It will be checked by a member of the Innovation Growth Lab team, who may be in contact to ask for more information. Your email address * Your name * Title * The name of the study Short summary An online platform for contract enforcement in the Peruvian textile sector. Results forthcoming. A brief description of the project's goals and its current state Abstract <p>Firms in Peru’s Gamarra – Latin America’s largest garment cluster, with 20,000 firms, $1.2 billion in annual sales, and 100,000 employees – face a dilemma. Previous reforms lowered entry barriers to such a point that they incentivized firm creation, which increased anonymity, weakened existing contract enforcement mechanisms, and hindered specialization. Fierce competition, shrinking profit margins, underutilized capacity, and the lack of trust have become the biggest barriers to growth. Gamarra’s firms are forced to stay small because they are squeezed: on the one hand, they are pushed to integrate activities within the firm to overcome the lack of contract enforcement in the market, yet there they confront internal agency costs, which pushes firms back into the marketplace to sub-contract activities. In the end, firm owners often opt to do the work themselves – and productivity suffers because they cannot achieve gains from specialization. Gamarra – like many emerging market SME clusters with contract enforcement issues – needs not more firms but more firm growth. This study will test an online contract enforcement platform mechanism for emerging market SMEs. In partnership with Corporación Financiera de Desarrollo (COFIDE), it will add a user-driven ratings and punishment mechanism to an existing SME services portal and will assess its impact via a randomized evaluation. If successful, the mechanism could expand the extent of the market for SMEs and help them capture gains from trade through increasing specialization. Although the research would take place in a Peruvian garment cluster, the contract enforcement mechanism would have applications in SME marketplaces in other emerging markets.</p> The full abstract of the study, if available Links http://www.poverty-action.org/sme/competitivefund/project14 Links to any published papers and related discussions Authors * Affiliations Academic and other institutes that the authors of the study are members of Delivery partner Organisations involved in delivering the trial, if appropriate Year Year Year199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023202420252026 Month MonthJanFebMarAprMayJunJulAugSepOctNovDec Day Day12345678910111213141516171819202122232425262728293031 Journal Journal publishing the study, if available Publication stage * Working Paper Published Ongoing Research Forthcoming Discussion Paper Research theme * Entrepreneurship Innovation Business Growth Country Country or countries where this study took place. Topics What sort of topics does the study cover? Sample attributes Hypotheses / research question Can a third party contract enforcement mechanism help firms be more productive and grow? Sample Trial population and sample selection Garment industry firms in the Gamarra neighbourhood in Lima, Peru. Number of treatment groups Size of treatment groups Size of control group Unit of analysis Clustered? Yes No Cluster details Trial attributes Treatment description Online contract enforcement platform. Rounds of data collection Baseline data collection and method Data collection method and data collected Evaluation Outcome variables Results <p>Not yet available.</p> Intervention costs Not available. Cost benefit ratio Reference Bird, M., 2015. 'Testing a 3rd Party Contract Enforcement Solution in a Peruvian Textile Cluster'. Innovations for Poverty Action - Project Registry. Citation for use in academic references
