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Testing the impact of information and quality ratings on SME use of professional business services
Initial registration date
April 10, 2020
April 13, 2020 12:16 PM EDT
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Other Primary Investigator(s)
Additional Trial Information
The main question we address is why don’t more SMEs use the market for professional business services like accounting, marketing and HR? Such marketplaces form a crucial institution that can support private sector growth and innovation, yet they are inefficient in developing economies. We hypothesize that two key reasons are firms (i) lack information about the availability of these services, and (ii) cannot distinguish the quality of good versus bad providers. We conduct a randomized experiment to test a) the extent to which firms react to different forms of quality information given to them about business service providers; and b) whether information about the existence and quality of providers in turn is sufficient to get SMEs to purchase services from these providers.
Anderson, Stephen and David McKenzie. 2020. "Testing the impact of information and quality ratings on SME use of professional business services." AEA RCT Registry. April 13.
We conduct a baseline survey of SMEs, and randomly assign them into one of five groups:
1. A control group, that receives no intervention
2. Four groups that get shown a dashboard with information about business service providers, in which they are asked to choose their top three providers in marketing, accounting, and HR. They are also given an information pamphlet with the contact details of these providers. The four groups differ in what information is provided about quality;
Treatment group 1: information only, no quality information
Treatment group 2: quality star ratings, no comments
Treatment group 3: quality star ratings, plus negative comments
Treatment group 4: quality star ratings, plus positive and negative comments
Intervention Start Date
Intervention End Date
Primary Outcomes (end points)
We have two types of outcomes:
1) Choice of Providers on the platform, made by those in the four treatment groups, and made at the time of using the platform.
2) Steps towards hiring a provider, and use of a provider, measured 6 months later.
Primary Outcomes (explanation)
We will consider the following outcomes, motivated by our grant proposal to EDI submitted in February 2018, and finalized in July 2018.
For each of HR, Marketing, and Accounting provider type:
(i) The proportion of providers shortlisted by an SME (i.e., three selections) that have a quality ranking in the top third of all providers (ii) The average quality rating of the three providers chosen
(iii) The proportion of providers chosen which have a rating in the bottom third.
From the 6-month survey:
(iv) Steps towards hiring a provider:
- knows a business service provider
- is confident in ability to find a high-quality specialist if they want one
- has contacted a business service provider in the past six months
- plans to use a specialist in the next 12 months
(v) Did the SME hire a business service provider in the six months post-intervention?
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Randomization is stratified by survey mode (fixed list vs door-to-door), and firms were first randomized to the control group or an information treatment group, then conditional on being in the information treatment, randomized to whether or not they received quality ratings information.,
Experimental Design Details
Randomization done ex ante by computer privately.
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
Sample sizes are:
Pure control group: 297 firms
Information only group: 187 firms
Quality star ratings only: 187 firms
Quality star ratings plus negative information: 184 firms
Quality star ratings plus positive and negative information: 200 firms
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
INSTITUTIONAL REVIEW BOARDS (IRBs)