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Discrimination as a Barrier to Growth: Experimental Evidence from Ethiopia
Last registered on April 09, 2021

Pre-Trial

Trial Information
General Information
Title
Discrimination as a Barrier to Growth: Experimental Evidence from Ethiopia
RCT ID
AEARCTR-0006518
Initial registration date
September 23, 2020
Last updated
April 09, 2021 1:37 PM EDT
Location(s)

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Primary Investigator
Affiliation
UC Merced
Other Primary Investigator(s)
PI Affiliation
PI Affiliation
Additional Trial Information
Status
On going
Start date
2019-10-01
End date
2022-12-31
Secondary IDs
Abstract
Gender discrimination against entrepreneurs, who form the largest sector of the labor force in Sub-Saharan Africa, may drive gender gaps in access to capital and subsequently reduce the performance of female-owned businesses. Observable differences between men and women entrepreneurs explain only a small portion of the “gender profit gap”, suggesting gender discrimination may be an important, yet understudied, factor inhibiting the success of female entrepreneurship.1 This raises concerns about gender equity, but also growth: by misallocating capital, discrimination can reduce the returns to capital and thereby reduce productivity and economic growth. Thus, there may be an opportunity to both increase gender equity and improve efficiency in the allocation of capital.

In our paper, we use a randomized experiment to identify whether Ethiopian financial providers discriminate against female entrepreneurs when evaluating their business’ productivity. To identify the extent and implications of gender discrimination in capital access, we implement a business plan competition in which entrepreneurs are evaluated by a representative panel of 200 financial providers. To estimate discrimination, we randomly assign the entrepreneur to be presented as female or male. Our paper will answer whether financial providers discriminate against female entrepreneurs, the largest segment of the labor force, reducing gender equity?
External Link(s)
Registration Citation
Citation
Ayalew, Shibiru, Shanthi Manian and Ketki Sheth. 2021. "Discrimination as a Barrier to Growth: Experimental Evidence from Ethiopia." AEA RCT Registry. April 09. https://doi.org/10.1257/rct.6518-1.2000000000000002.
Experimental Details
Interventions
Intervention(s)
To identify the extent and implications of gender discrimination in capital access, we implement a business plan competition in which entrepreneurs are evaluated by a representative panel of 200 financial providers. To estimate discrimination, we randomly assign the entrepreneur to be presented as female or male.
Intervention Start Date
2020-09-01
Intervention End Date
2020-11-01
Primary Outcomes
Primary Outcomes (end points)
For the evaluation of businesses, our primary outcomes are the evaluator's Final Score and Predicted Profits (both with and without providing additional capital to the business) for the business.
Primary Outcomes (explanation)
Final Score refers to the score given to the business in the competition, and Predicted Profits is what the evaluator predicts the business' profits will be in January 2021.
Secondary Outcomes
Secondary Outcomes (end points)
For the evaluation of businesses, our secondary outcomes are the evaluator's prediction of the business' survival, assets, and job creation in January 2021 with and without recieving additional capital, whether the evaluator recommended the business for a loan.
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
To identify the extent and implications of gender discrimination in capital access, we implement a business plan competition in which entrepreneurs are evaluated by a representative panel of 200 financial providers. To estimate discrimination, we randomly assign the entrepreneur to be presented as female or male.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer
Randomization Unit
judge-business
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
0
Sample size: planned number of observations
6000 (evaluations)
Sample size (or number of clusters) by treatment arms
approximately 3000 evaluations per treatment arm (perceived gender of applicant)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
UC Merced
IRB Approval Date
2019-10-07
IRB Approval Number
UCM2019-87
Analysis Plan

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