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Can diversification reduce small business vulnerability?
Initial registration date
December 15, 2019
July 05, 2020 9:33 AM EDT
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Insper Institute of Education and Research
Other Primary Investigator(s)
Additional Trial Information
This study investigates whether and how diversification in small businesses reduces the vulnerabilities to which poor entrepreneurs are exposed. We indirectly (and randomly) change the level of diversification of a group of small businesses in Brazil by increasing entrepreneurs' ability to sell through a platform. Treatment thus consists of online training sessions aimed at increasing entrepreneurs' platform-related sales and marketing capabilities. Main analyses focus on how treatment impacts platform sales and core-business sales (to grasp potential diversification effects). Other analyses consider how treatment impacts the diffusion of platform sellers within geographic regions.
All businesses in the sample are, to some extent, diversified since they sell both core business products/services and platform services, such as bill payment, phone recharges. Businesses randomly assigned to treatment receive platform-related sales and marketing training to increase the proportion of platform sales (i.e., revenues from the diversified source) vis-a-vis total business revenues.
Intervention Start Date
Intervention End Date
Primary Outcomes (end points)
The primary outcomes of interest are platform sales (diversified source), total business sales (including non-diversified source) and the ratio between these variables. Business average profits are also examined, as well as the number of platform sellers within ZIP codes.
Primary Outcomes (explanation)
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
About half of businesses were assigned to treatment. Treatment was stratified in two levels: industry/sector and preexisting platform sales experience (i.e., a group with higher number of platform transactions in the nine months preceding the beginning of the trial versus a group with lower number of platform transactions in the same period). To avoid contamination, most of the businesses in the study are located in separated geographic areas. This design also allows for a ZIP-code-level analysis of treatment effects on platform diffusion.
Experimental Design Details
Randomization done in office by a computer.
Was the treatment clustered?
Sample size: planned number of clusters
Sample size: planned number of observations
Sample size (or number of clusters) by treatment arms
151 businesses treatment and 155 businesses control
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
INSTITUTIONAL REVIEW BOARDS (IRBs)