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

Last registered on December 17, 2020

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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

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

April 13, 2020, 12:16 PM EDT

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

Last updated

December 17, 2020, 10:04 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

Nigeria

Region

Lagos and Abuja

Primary Investigator

Name

David McKenzie

Affiliation

World Bank

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Other Primary Investigator(s)

PI Name

Stephen Anderson

PI Affiliation

Stanford University

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Additional Trial Information

Status

On going

Start date

2019-09-02

End date

2021-03-31

Keywords

Firms & Productivity

Additional Keywords

JEL code(s)

O12, L26, L24, M31, M41

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. 2020. "Testing the impact of information and quality ratings on SME use of professional business services." AEA RCT Registry. December 17. https://doi.org/10.1257/rct.5707-1.2000000000000002

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

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?

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

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