Impact of COVID-19 Stimulus Packages on Small and Medium Enterprises (SMEs)

Last registered on April 13, 2021

Pre-Trial

Trial Information

General Information

Title
Impact of COVID-19 Stimulus Packages on Small and Medium Enterprises (SMEs)
RCT ID
AEARCTR-0007534
Initial registration date
April 12, 2021

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, 2021, 11:32 AM EDT

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

Locations

Region

Primary Investigator

Affiliation
Universidad de Chile

Other Primary Investigator(s)

PI Affiliation
Northwestern University
PI Affiliation
UC Berkeley
PI Affiliation
IDB
PI Affiliation
Universidad de Chile

Additional Trial Information

Status
In development
Start date
2021-03-21
End date
2021-12-31
Secondary IDs
Abstract
The economic recovery from the COVID-19 crisis in Latin America hinges on the survival of SMEs, which employ a large fraction of the region’s workforce. Governments are responding with large economic stimulus packages, including liquidity or methods to prop up demand for SMEs. We are evaluating the impact of randomly offering loans to SMEs within the framework of the Chilean Government COVID-19 support program. The researchers hope to understand what might be preventing firms from taking up these services and to quantify the impact of pandemic-specific protections and relief on firm profits, survival, and employment.
External Link(s)

Registration Citation

Citation
Gertler, Paul J. et al. 2021. "Impact of COVID-19 Stimulus Packages on Small and Medium Enterprises (SMEs)." AEA RCT Registry. April 13. https://doi.org/10.1257/rct.7534
Sponsors & Partners

Sponsors

Experimental Details

Interventions

Intervention(s)
A Chilean bank randomly offers credits to SMEs. Credits are supported by the stimulus package designed by the Chilean Government.
Intervention Start Date
2021-03-21
Intervention End Date
2021-04-30

Primary Outcomes

Primary Outcomes (end points)
We hope to understand what might be preventing firms from taking up these services and to quantify the impact of pandemic-specific protections and relief on firm profits, survival, and employment. Key primary outcomes are the following:

Take Up Rate, measured as the proportion of firms who take up the offered loan

Profits, measured in US dollars.

Sales, measured in US dollars.

Survival Rate, measured as the proportion of firms that continue with their activities

Employment, measured as the number of workers per firm.



Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We will be working with potential and actual SME clients of a Chilean bank. Firms are divided in the following three eligible groups, with roughly 10,000 firms in total:
i) Firms that were contacted in the last credit campaign to face the current crisis, and that requested credit but may need more credit now;
ii) Firms that were contacted in the last credit campaign to face the current crisis, and that did not requested credit but but may need credit now;
iii) Firms that requested a loan but were rejected / not pre-selected by the bank in the last credit campaign. In particular, these are firms that were at the credit rejection limit, that is, firms that would have been approved for the loan they requested if the scoring criteria for accepting a loan had been marginally more flexible.

The experiment works as follows:

1) 50% of the firms will be randomly assigned to the treatment (encouraged) group and 50% of them to the control (non-encouraged) group.
2) Treatment-group firms will be informed by text messages, phone, and/or emails regarding the existence of credit opportunities offered by the bank within the framework of the relief program designed by Chilean government. The bank will offer them as many administrative facilities as possible to convince them to actually apply for credit and complete the loan application. Control firms will not be either informed not helped to apply for credit.
3) Treatment (encouraged) firms that apply for credit will be offered a loan. Control-group (non-encouraged) firms can apply to credits by their own means, and the bank will not a priori deny them access to credit.
Experimental Design Details
Randomization Method
Randomization is implemented by researchers in their own computers. The results of randomization is then sent to bank administrators in separate lists: one list of treatment firms, another list of control firms. Along with this, we send a monitoring data base that bank administrators have to continuously update in order to monitor the take up rate across experimental groups.
Randomization Unit
Randomization is at the firm level. We stratify randomization by firm type (3 categories), credit scoring (3 categories), and sales (3 categories)
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
Randomization unit is the firm. This is no a clustered randomized trial
Sample size: planned number of observations
10,072 firms
Sample size (or number of clusters) by treatment arms
5069 treatment firms;
5003 control firms
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Northwestern University IRB
IRB Approval Date
2021-03-31
IRB Approval Number
STU00213968
IRB Name
Office for the Protection of Human Subjects, UC Berkeley
IRB Approval Date
2021-03-30
IRB Approval Number
CPHS Protocol # 2021-03-14127

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