Debt Recovery, Information Provision, and Legal Counseling for Firms: Experimental Evidence from Mumbai Courts

Last registered on August 14, 2024
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Pre-Trial

Trial Information

General Information

Title
Debt Recovery, Information Provision, and Legal Counseling for Firms: Experimental Evidence from Mumbai Courts
RCT ID
AEARCTR-0014173
Initial registration date
August 12, 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
August 14, 2024, 2:47 PM 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
Manaswini Rao
Affiliation
University of Delaware
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Other Primary Investigator(s)

PI Name
Raghav Pandey
PI Affiliation
National Law University Delhi
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Additional Trial Information

Status
On going
Start date
2024-07-01
End date
2026-06-30
Keywords
Finance & Microfinance, Firms & Productivity, Governance
Additional Keywords
Courts, Banks, Firms
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Severely backlogged courts are often cited as one of the significant roadblocks in the process of entrepreneurship development, efficient resource allocation, and ultimately, economic growth. While the focus of research and policy thus far has been on the role of state capacity behind judicial inefficiency, we have little understanding about the role of economic agents themselves - individuals and firms - in the creation and perpetuation of such inefficiency. In this project, we seek to improve the response rate of litigating parties to court summons in order to speed up backlog resolution of debt recovery disputes through an experimental information intervention. Specifically, we vary the nature of information - generic vs. specific legal counseling - on the outcomes of the debt defaulters and a spillover sample of potentially connected entrepreneurs through changes in both debtor and creditor behavior.
External Link(s)

Registration Citation

Citation
Pandey, Raghav and Manaswini Rao. 2024. "Debt Recovery, Information Provision, and Legal Counseling for Firms: Experimental Evidence from Mumbai Courts." AEA RCT Registry. August 14. https://doi.org/10.1257/rct.14173-1.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2024-07-15
Intervention End Date
2026-03-31

Primary Outcomes

Primary Outcomes (end points)
Debt defaulter behavior and access to credit
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
In this project, we cluster-randomize the set of debt (enterprise) defaulters by market neighborhood-level to the following experimental groups: T1 - receive generic information on the importance of dispute resolution through alternate resolution platforms such as mediation instead of costly litigation through the same courts; T2 - receive specific legal information on the case listed for hearing, informing the litigant of their legal rights and required documentation to enable quick settlement; and Control - status quo where the litigant only receives official communication in the form of summons (which are also sent to those in T1 and T2). We follow up to obtain debt and financial outcomes, and subsequently economic production outcomes in a series of post-intervention primary data collection exercises.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer program
Randomization Unit
Market neighborhood
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
500 neighborhoods
Sample size: planned number of observations
1200 firms
Sample size (or number of clusters) by treatment arms
400 control, 400 pamphlet information, 400 legal counseling
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Institute of Financial Management and Research
IRB Approval Date
2024-01-30
IRB Approval Number
IRB00007107
Analysis Plan