Communication Frictions and Knowledge Transfers: Evidence from FDI

Last registered on June 29, 2019

Pre-Trial

Trial Information

General Information

Title
Communication Frictions and Knowledge Transfers: Evidence from FDI
RCT ID
AEARCTR-0004326
Initial registration date
June 17, 2019

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
June 29, 2019, 5:18 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

Affiliation
Columbia University

Other Primary Investigator(s)

PI Affiliation
Columbia University
PI Affiliation
Columbia Business School
PI Affiliation
London School of Economics and Political Science

Additional Trial Information

Status
In development
Start date
2019-01-20
End date
2022-12-31
Secondary IDs
Abstract
Many developing countries rely on Foreign Direct Investment (FDI) to generate employment and growth, in part expecting spillovers from these highly productive foreign firms. One of the mechanisms through with spillovers can arise is the transmission of knowledge from foreign managers to domestic employees inside the firm.
We design two experiments to show the existence of these knowledge transfers and identify the importance of one of the main barriers that could prevent the transmission of human capital inside the firm: language frictions. The two experiments take place in Myanmar. The first experiment consists in asking Human Resources managers from domestic firms to rate a series of hypothetical resumes from candidates they could consider hiring. Through this experiment, we plan to measure the labor market returns of experience at a FDI firm and how that premium varies with the intensity of communication between local employees and foreign managers. The second experiment consists in providing foreign language training to current employees of FDI firms to test whether learning the language of the foreign managers fosters communication and knowledge transfers.
External Link(s)

Registration Citation

Citation
Guillouet, Louise et al. 2019. "Communication Frictions and Knowledge Transfers: Evidence from FDI." AEA RCT Registry. June 29. https://doi.org/10.1257/rct.4326
Former Citation
Guillouet, Louise et al. 2019. "Communication Frictions and Knowledge Transfers: Evidence from FDI." AEA RCT Registry. June 29. https://www.socialscienceregistry.org/trials/4326/history/48958
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Our first intervention is a resume rating experiment. We ask Human Resources (HR) managers at domestic firms to evaluate hypothetical resumes by giving a grade and a wage value to each profile. The resumes will be similar to the resumes these recruiters review when hiring a manager. We randomly vary certain characteristics shown on the resumes, such as the ability to speak a foreign language and experience at an FDI firm with varying levels of communication with the foreign managers in the firm.
Our second intervention is a language training experiment. We randomly provide current employees of FDI firms with English courses (48 hours of group classes, adjusted to the initial level of the trainees). At the end of the course, we will measure english skills, communication levels and knowledge transfers for both treated and control individuals.
Intervention Start Date
2019-02-20
Intervention End Date
2020-12-31

Primary Outcomes

Primary Outcomes (end points)
For the resume experiment, the outcomes of interest are the grades and wage value attributed by the HR managers for each of the different resumes.
For the language experiment, the outcomes of interest are the language level, the intensity of communication with foreign managers inside the firm and career outcomes: promotions, wages, knowledge transfers and future job opportunities.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
For the resume experiment, we are recruiting firms via job posting platforms combined with a snowball strategy where each of the participating HR managers is asked to submit a list of firms we could contact. We are designing the hypothetical resumes based on a sample of real resumes obtained from an industrial zone. The HR managers knows that the resumes are hypothetical. For each manager, we randomize the elements of the resumes they are asked to rate.
For the language experiment, we construct a sample of approximately 400 Myanmar managers working at Thilawa, Myanmar’s first Special Economic Zone. These managers earn approximately more than three times the minimum salary. There are about 30 firms in the sample, and we will stratify the language opportunity by firm. Within each firm, half of the managers in the sample will be offered a spot in a free English course. The provider is the same for all participants and is one of the leading firms in this sector in Myanmar. We survey both treatment and control individuals regularly over the course of the treatment rollout.
Experimental Design Details
Not available
Randomization Method
The resume experiment is run on a computer.
For the language experiment, we randomized via a blind name-tag lottery at each firm, in front of at least the HR manager and an eligible manager.
Randomization Unit
Resume experiment: resume
Language experiment: domestic manager/employee
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Resume experiment: 2000 resumes
Language experiment: 300 managers
Sample size: planned number of observations
Resume experiment: 2000 resumes Language experiment: 300 managers
Sample size (or number of clusters) by treatment arms
Resume experiment: 250 resumes per treatment cell (type of FDI / position in the organization / language skill)
Language experiment: 150 managers treated, 150 managerscontrol
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Columbia University
IRB Approval Date
2019-02-21
IRB Approval Number
IRB-AAAR2302
IRB Name
IRB Columbia University
IRB Approval Date
2019-05-09
IRB Approval Number
IRB-AAAS3817