The Impulso Chileno program is divided into two stages. The first stage consists of a business plan competition to identify high-potential Chilean small and medium enterprises (SMEs). The program's second stage is where the top-rated firms from the competition receive the intervention itself: a business training course, individual mentoring, and a large cash transfer to invest in their businesses.
Our impact evaluation will randomly assign the top 500 firms participating in the competition into treatment and control groups to measure the program’s effect on the firm's growth.
Business Plan Competition:
The business plan competition will be held between September 2022 and January 2023. During this period, we expect around 20,000 firms to apply to the contest through an online application that gathers basic firm and entrepreneur-level data and their business plan proposal.
Firms must be formal and have annual sales within a pre-specified bracket [~$7,600 to $380,000 USD] to qualify as a high-potential SME. Firms that do not comply with these prerequisites are disqualified. Firms who fit these criteria will be scored based on their business model, entrepreneur’s profile, and business plan proposal.
The top-rated 2,500 firms will then be asked to submit tax statements for the previous four months and a 3-minute video explaining their business model and business plan. An evaluation committee (formed by representatives of the implementation partners) will watch the videos, review the documents, and re-rank the contenders to select the top 700 of them as semi-finalists.
Each semi-finalist will have a 30-minute interview with members of the evaluation committee, where entrepreneurs will present their business plan proposal. Based on this interview, the 700 firms will be re-ranked once again to find the top 500 finalists for the program.
Toward the end of January 2023, 250 finalists will be randomly assigned to a treatment group, while the rest will form a control group. Between February and July 2023, the treatment group will receive the three components of the program: a monetary transfer, business training and mentoring. Meanwhile, the control group will receive none of these components.
This randomization will be stratified based on the entrepreneur’s gender and the macro-zone from where the business is operated from. A macro-zone is an aggregation of different Chilean regions (analogous to US states), which split the country into 6 distinct areas; North, Center, Center-South, South and Austral Macrozones, along with the Metropolitan region of Santiago de Chile.
In-person baseline surveys will be carried out at each finalist's place of work throughout December 2022 and January 2023, before the randomized selection process is carried out (N=500). Follow-up surveys will be conducted 12 months later. Most of the medium-term effects of the program will be measured using these surveys. We plan to use administrative data from unemployment insurance and tax authorities to measure the long-term impact of Impulso Chileno, if available.
Regression Discontinuity Design
Apart from the randomized control trial involving the top 500 firms, we will also survey and gather data from the next 200 firms who did not reach the business plan competition’s threshold to become finalists. We plan on using the scores and ranking within the business plan competition as the running variable in a regression discontinuity design, comparing the 200 non-finalist with the 250 control group firms. This data will be used to evaluate the contest’s effectiveness in identifying top firms and comparing the program’s impact on the average firm to those firms closer to the cut off.