Training Microentrepreneurs in Rural Chile: The Role of Soft Skills and Mentoring and the Identification of Gazelles

Last registered on May 21, 2024
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Pre-Trial

Trial Information

General Information

Title
Training Microentrepreneurs in Rural Chile: The Role of Soft Skills and Mentoring and the Identification of Gazelles.
RCT ID
AEARCTR-0012748
Initial registration date
May 14, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
May 21, 2024, 10:29 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

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Primary Investigator

Name
Martin Valdivia
Affiliation
Grupo de Anlisis para el Desarrollo
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
On going
Start date
2022-06-25
End date
2025-12-31
Keywords
Firms & Productivity
Additional Keywords
Micro-Entrepreneurship, Business Training
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This study presents a randomized controlled trial (RCT) to assess the impact of a business training program implemented by Balloon Latam in rural communities of the Araucanía region in Chile. The program aims to strengthen entrepreneurial skills among excluded populations from the formal labor market, with a focus on women-led micro and small businesses.

The RCT will evaluate the effectiveness of the program’s training, which combines the transmission of proven business practices and soft skills such as personal initiative, self-confidence, self-control, team leadership, and negotiation skills. The program also includes a motivational component, aiming to find the purpose and impacts of the business, and a social linking component, serving as a tool for networking, motivation, support, and even social pressure toward fulfilling each business’s goals. In this component, participants are incentivized to pitch their businesses to other entrepreneurs in the program and build business relationships with them.
The initial sample will be randomly divided into three groups: a control group, which will not receive any intervention, and two treatment groups. The first treatment group (T1) will participate in both stages of the training (learning basic and advanced topics), while the second treatment group (T2) will only participate in the first stage of the training. Both groups will enjoy networking events, which will be further reinforced during the second stage of the program.

The study aims to expand current knowledge by generating evidence about the role of strengthening the soft skills of entrepreneurs when these skills are trained in conjunction with the teaching of practical application tools for business development and they are given opportunities to make use of these soft skills to make and maintain relationships with other entrepreneurs. The study also seeks to identify high-potential businesses (gazelles) and determine whether the interventions work better or worse with them. The results of this RCT will contribute to the understanding of what works to empower women entrepreneurs, especially in a rural context.
External Link(s)

Registration Citation

Citation
Valdivia, Martin. 2024. "Training Microentrepreneurs in Rural Chile: The Role of Soft Skills and Mentoring and the Identification of Gazelles.." AEA RCT Registry. May 21. https://doi.org/10.1257/rct.12748-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Balloon Latam is the organization in charge of delivering the entrepreneurial training, which aims to strengthen the growth possibilities of rural businesswomen through training that includes not only the transmission of good practices that characterize successful rural entrepreneurs, but also the transmission of soft skills. The first treatment group will partake in the full two-stage training program, whereas the second treatment group will only take part in the first stage.
Intervention Start Date
2022-08-01
Intervention End Date
2024-01-05

Primary Outcomes

Primary Outcomes (end points)
Business Practices Index and Business Outcomes (Business Survival, Sales, Costs, Business Profits).
In addition, I will explore strategies to ex-ante identify the entrepreneurial potential of the participants, in order to identify the beneficiaries who can benefit the most from the training.
Primary Outcomes (explanation)
The questionnaire includes a set of questions to measure business practices for small firms (McKenzie and Woodruff, 2015), and indicators that have been as key elements to explain the success of micro-entrepreneurs in developing economies (Campos et al., 2017). To construct the business practices index, I will compute the z-score of each component by subtracting the mean of the control group and then dividing by the standard deviation of the control group; these will then be aggregated and re-standardized to obtain an aggregate z-score.

Secondary Outcomes

Secondary Outcomes (end points)
Household income and expenses
Community participation index
Environmental consciousness
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Balloon Latam was asked to select 1200 individuals to take part in the study. They were selected as part of Balloon’s activities in the region of La Araucanía, Chile. As a first step, Balloon launched an open call through local media including: radio, flyers, word-of-mouth, and social media. Through these media, contact information was provided for individuals to contact Balloon and access more information about the program. All participants that showed interest were then invited to complete a short survey in which Balloon verified that the would-be participants met the following requirements: 1) They must have a RUT (tax registration), and 2) they must have either an on-going business or a business idea. Subject to these requirements, individuals were eligible for training and were, subsequently, invited to take part in the study and answer the baseline survey. Treatment was randomly assigned among those who completed the baseline survey. For logistic and balance purposes, randomization was stratified by geographical area, line of business, and whether they had a business idea or an active business; we chose the treatment assignment with the most balanced characteristics across all eligible replications. Since the timing of surveying will be different for both interventions for the first follow up, the short term impact of each intervention will be assessed against the respective control group (C1 for T1 and C2 for T2). The longer term effects will be assessed against the full control group for both interventions.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Individuals
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1214 individuals
Sample size: planned number of observations
1214
Sample size (or number of clusters) by treatment arms
Randomly assigned 405 to the two-stage program (T1), 405 to the one-stage program (T2), and 404 to the control group, which was evenly and randomly split into two with 202 individuals in each (C1 & C2).
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Innovations for Poverty Action
IRB Approval Date
2022-04-25
IRB Approval Number
16330
Analysis Plan