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Business Registration Impact Evaluation
Last registered on January 03, 2014

Pre-Trial

Trial Information
General Information
Title
Business Registration Impact Evaluation
RCT ID
AEARCTR-0000194
Initial registration date
Not yet registered
Last updated
January 03, 2014 3:50 AM EST
Location(s)
Region
Primary Investigator
Affiliation
World Bank
Other Primary Investigator(s)
PI Affiliation
World Bank
Additional Trial Information
Status
On going
Start date
2011-11-01
End date
2014-12-31
Secondary IDs
Abstract
The research team is currently carrying out a randomized experiment in Malawi to measure the impact of formalization for Micro, Small and Medium Enterprises (MSMEs), and assess the complementary value of business bank accounts as a means of separating firm and household finances. While informality is often seen as an obstacle to business growth and economic development, very little is known on the relative importance of this constraint. The benefits of formality may include increased access to financial services, markets, government support programs and networks.

Other development obstacles are often considered complementary to informality. One problem for MSMEs in Malawi is that household and business resources tend to be strongly intertwined, resulting in the depletion of working capital. Hence, spurring the separation of household and business money by informing about its benefits and offering business bank accounts with access to the SME Department of a Bank, may have strong positive effects in adding value to business registration. This study also examines whether male and female-owned enterprises gain equally from registration, and whether the effects of registration are heterogeneous on other dimensions.

The target group of this study consists of 3,000 informal MSMEs located in Blantyre and Lilongwe, the major commercial cities in Malawi. These firms were identified through several listing exercises and selected based on a pre-defined set of criteria. The researchers stratified firms in the sample by a set of measures, including gender, location, and sector and then randomly assigned them to either one of the treatment arms or the control group. The study intervention consists of three treatment arms (totalling 2,250 firms) and one control group (750 firms). In order to test the impact of business registration on business performance, all 2,250 firms in the treatment group were offered costless registration with the Department of the Registrar General (DRG) – which is the main step to firm formalization in Malawi. Out of these, 750 firms were solely offered the DRG registration. A random group of 300 firms was also offered to register for taxes and obtain a Tax Payable Identification Number (TPIN) from the Malawian Tax Authority, allowing the researchers to test the additional value, if any, of this step in the formalization process. The remaining 1,200 firms in the treatment group were invited to information sessions by a local bank on the benefits of separating business from household money and offered business savings accounts.
The team is collecting extensive data – the first two follow-up surveys have been completed and two more rounds of follow-up surveys are planned for 2014 - to estimate the impact of the different treatment arms on business expansion, access to finance, and productivity of MSMEs. The outcomes of interest include measures of firms’ financial performance, investments in the business, survival rates, number and skill composition of employees, access to finance, number of customers, and harassment levels.

The outputs generated by this study will be directly relevant for policy. Malawi is currently streamlining its registration process to increase the registration rate amongst MSMEs. The Business Registration Impact Evaluation (BRIE) is a direct response to the interest of the Government of Malawi in evaluating whether or not business registration improves business performance. The government will therefore use the results of this study to promote registration (if positive impact is detected) or to identify the corresponding bottlenecks that affect enterprise performance (if no impact is identified).
External Link(s)
Registration Citation
Citation
Campos, Francisco and Francisco Campos. 2014. "Business Registration Impact Evaluation." AEA RCT Registry. January 03. https://doi.org/10.1257/rct.194-1.0.
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2012-04-01
Intervention End Date
2012-09-01
Primary Outcomes
Primary Outcomes (end points)
business registration, tax registration, (business) bank accounts, loans obtained, other financial products, business investment, employment, revenues, profits, harassment level
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Randomized Control Trial
Experimental Design Details
Randomization Method
Stratified Randomization
Randomization Unit
Firms
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
0
Sample size: planned number of observations
3,000 Firms
Sample size (or number of clusters) by treatment arms
750= Business Registration Certificate (BRC) alone; 300= BRC + Tax Payer Identification Number; 1,200= BRC + Information Sessions + Business Bank Accounts; 750= Control Group
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Innovations for Poverty Action IRB #00006083-USA
IRB Approval Date
2013-12-10
IRB Approval Number
#:13December-003Study Title: Business Registration Impact Evaluation (BRIE)
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports, Papers & Other Materials
Relevant Paper(s)
REPORTS & OTHER MATERIALS