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Can diversification reduce small business vulnerability?
Last registered on July 05, 2020

Pre-Trial

Trial Information
General Information
Title
Can diversification reduce small business vulnerability?
RCT ID
AEARCTR-0005181
Initial registration date
December 15, 2019
Last updated
July 05, 2020 9:33 AM EDT
Location(s)

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Primary Investigator
Affiliation
Insper Institute of Education and Research
Other Primary Investigator(s)
Additional Trial Information
Status
On going
Start date
2019-10-28
End date
2021-03-01
Secondary IDs
Abstract
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.
External Link(s)
Registration Citation
Citation
Nardi, Leandro. 2020. "Can diversification reduce small business vulnerability?." AEA RCT Registry. July 05. https://doi.org/10.1257/rct.5181-2.0.
Experimental Details
Interventions
Intervention(s)
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
2019-10-28
Intervention End Date
2020-02-29
Primary Outcomes
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
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
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
Not available
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Individual business.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
315 businesses
Sample size: planned number of observations
306 businesses
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)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number