Encouraging formal registration of micro and small enterprises in Indonesia

Last registered on November 27, 2019

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Pre-Trial

Trial Information

General Information

Title

Encouraging formal registration of micro and small enterprises in Indonesia

RCT ID

AEARCTR-0005007

Initial registration date

November 26, 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

November 27, 2019, 10:46 AM EST

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

Locations

Country

Indonesia

Region

Cross-country

Primary Investigator

Name

Sarah Dong

Affiliation

Australian National University

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Mathias Sinning

PI Affiliation

Australian National University

Contact Investigator

Additional Trial Information

Status

In development

Start date

2019-11-15

End date

2020-05-31

Keywords

Firms & Productivity

Additional Keywords

Informal sector, formal registration, micro and small business

JEL code(s)

O12 O17 O53

Secondary IDs

Abstract

The project aims to explore ways to encourage businesses to obtain formal registration and to test behavioral insights in the context of business registration. The project tackles informality, which is a common problem in economies of developing countries. We will make use of behavioral insights to design interventions that will be evaluated by a randomized controlled field trial. The research will generate evidence on the effectiveness of a new business registration system by providing information to businesses about the availability of the system, by pointing out that the system is free of charge, by addressing patriotic and altruistic motivations, and by highlighting that the new system is easy to use. Studying the effectiveness of interventions that aim to ‘nudge’ businesses to register will improve our understanding of how registration rates can be increased.

External Link(s)

Registration Citation

Citation

Dong, Sarah and Mathias Sinning. 2019. "Encouraging formal registration of micro and small enterprises in Indonesia ." AEA RCT Registry. November 27. https://doi.org/10.1257/rct.5007-1.0

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Experimental Details

Interventions

Intervention(s)

Several SMS or WhatsApp messages will be sent to micro and small businesses owners across Indonesia. We aim to study the effectiveness of four treatments. Treatment 1: Businesses are being informed that they can register online to obtain a certificate from the government. Treatment 2: Same as Treatment 1 plus pointing out that registration is free of charge. Treatment 3: Same as Treatment 1 plus stating "Let's grow the nations economy". Treatment 4: Same as Treatment 1 plus pointing out that the registration process is easy. The control group does not receive any messages during the trial period.

Intervention Start Date

2019-11-19

Intervention End Date

2020-01-10

Primary Outcomes

Primary Outcomes (end points)

A variable indicating whether or not the business has completed the registration process through the newly established online portal.

Primary Outcomes (explanation)

We obtain these outcomes by matching business owners who have registered through the online portal with business owners in our sample using an ID issued by the government. The ID has to be provided as part of the registration process.

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

This trial informs unregistered business owners in Indonesia about the possibility of using a newly established online portal to register their business. The online portal was created by our partner and authorized by the Indonesian government. The online registration takes about 15 minutes. Registered business owners receive an official registration certificate from the government. The aim of the trial is to test the effectiveness of sending SMS or WhatsApp messages to a large number of unregistered business owners to inform them about the online portal. We vary the messages to test several behavioral channels to encourage registration. Our main outcome measure is a variable indicating whether or not business owners use the website to register.

Experimental Design Details

Randomization Method

We use baseline characteristics (such as age and gender of the business owner, business sector, location, etc.) collected by our partner for randomized stratification. Stratified randomization is done in Stata using the user-written command randtreat version 1.4 (5 April 2017).

Randomization Unit

Stratified randomization is done at the individual (business owner) level.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

53,999 businesses

Sample size: planned number of observations

53,999 businesses

Sample size (or number of clusters) by treatment arms

Control group: 10,818 businesses
Treatment group 1: 10,795 businesses
Treatment group 2: 10,794 businesses
Treatment group 3: 10,777 businesses
Treatment group 4: 10,815 businesses

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB