Testing the impact of information and quality ratings on SME use of professional business services

Last registered on March 23, 2021

Pre-Trial

Trial Information

General Information

Title
Testing the impact of information and quality ratings on SME use of professional business services
RCT ID
AEARCTR-0005707
Initial registration date
April 10, 2020
Last updated
March 23, 2021, 5:24 PM EDT

Locations

Primary Investigator

Affiliation
World Bank

Other Primary Investigator(s)

PI Affiliation
Stanford University

Additional Trial Information

Status
Completed
Start date
2019-09-02
End date
2021-03-15
Secondary IDs
Abstract
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.
External Link(s)

Registration Citation

Citation
Anderson, Stephen and David McKenzie. 2021. "Testing the impact of information and quality ratings on SME use of professional business services." AEA RCT Registry. March 23. https://doi.org/10.1257/rct.5707-1.3
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
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
2019-09-02
Intervention End Date
2019-10-12

Primary Outcomes

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

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
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
The survey company were given separate lists of identification numbers to use for surveying from a fixed list of firms, plus for using with firms found through door-to-door surveying. These numbers were randomly assigned to the pure control group, or one of the four different treatment groups.
Randomization Method
Randomization done ex ante by computer privately.
Randomization Unit
Firm
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1,054 firms
Sample size: planned number of observations
1,054 firms
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)
Supporting Documents and Materials

Documents

Document Name
EDI Grant Proposal
Document Type
proposal
Document Description
This is our grant proposal to EDI, finalized and signed on July 9, 2018 (over a year prior to starting the study). It serves to illustrate the intended design and outcomes at this initial design stage. Step 5 in the proposal describes the experiment being registered here.
File
EDI Grant Proposal

MD5: 499562e186c5b1ca3c082e6603dd61ce

SHA1: a59aa9c54bee46692361090a58f69b03f928207f

Uploaded At: April 10, 2020

IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials