Simon Quinn

When is capital enough to get female enterprises growing ? evidence from a randomized experiment in Ghana

Standard models of investment predict that credit-constrained firms should grow rapidly when given additional capital, and that how this capital is provided should not affect decisions to invest in the business or consume the capital. The authors randomly gave cash and in-kind grants to male- and female-owned microenterprises in urban Ghana. Their findings cast doubt on the ability of capital alone to stimulate the growth of female microenterprises. First, while the average treatment effects of the in-kind grants are large and positive for both males and females, the gain in profits is almost zero for women with initial profits below the median, suggesting that capital alone is not enough to grow subsistence enterprises owned by women. Second, for women they strongly reject equality of the cash and in-kind grants; only in-kind grants lead to growth in business profits. The results for men also suggest a lower impact of cash, but differences between cash and in-kind grants are less robust. The difference in the effects of cash and in-kind grants is associated more with a lack of self-control than with external pressure. As a result, the manner in which funding is provided affects microenterprise growth.

Two Sides of the Same Rupee? Comparing Demand for Microcredit and Microsaving in a Framed Field Experiment in Rural Pakistan

Standard models often predict that people should either demand to save or demand to borrow, but not both. We hypothesise instead that saving and borrowing among microfinance clients are substitutes, satisfying the same underlying demand: for a regular schedule of deposits and a lump-sum withdrawal. We test this using a framed field experiment among women participating in group lending arrangements in rural Pakistan. The experiment — inspired by the rotating structure of a ROSCA — involves randomly offering credit products and savings products to the same subject pool. We find high demand both for credit products and for savings products, with the same individuals often accepting both a credit product and a savings product over the three experiment waves. This behavior can be rationalised by a model in which individuals prefer lump-sum payments (for example, to finance a lumpy investment), and in which individuals struggle to hold savings over time. We complement our experimental estimates with a structural analysis, in which different ‘types’ of participants face different kinds of constraints. Our structural framework rationalises the behaviour of 75% of participants; of these ‘rationalised’ participants, we estimate that two-thirds have high demand for lump-sum payments coupled with savings difficulties. These results imply that the distinction between microlending and microsaving may be largely illusory; participants value a mechanism for regular deposits and lump-sum payments, whether that is structured in the credit or the debt domain.

Networks and Manufacturing Firms in Africa: Results from a Randomized Field Experiment

We run a novel field experiment to link managers of African manufacturing firms. The experiment features exogenous link formation, exogenous seeding of information, and exogenous assignment to treatment and placebo. We study the impact of the experiment on firm business practices outside of the lab. We find that the experiment successfully created new variation in social networks. We find significant diffusion of business practices only in terms of VAT registration and having a bank current account. This diffusion is a combination of diffusion of innovation and simple imitation. At the time of our experiment, all three studied countries were undergoing large changes in their VAT legislation.

Job fairs : matching firms and workers in a field experiment in Ethiopia

Do matching frictions affect youth employment in developing countries? We organise job fairs in Addis Ababa, to match firms with a representative sample of young, educated job-seekers. We create very few jobs: one for approximately 10 firms that attended. We explore reasons for this, and find significant evidence for mismatched expectations: about wages, about firms requirements and about the average quality of job-seekers. We find evidence of learning and updating of beliefs in the aftermath of the fair. This changes behaviour: both workers and firms invest more in formal job search after the fairs

Call Me Maybe: Experimental Evidence on Using Mobile Phones to Survey Microenterprises

High-frequency data is useful to measure volatility, reduce recall bias, and measure dynamic treatment effects. We conduct the first experimental evaluation of high-frequency phone surveys in a developing country or with microenterprises. We randomly assign microenterprise owners to monthly in-person, weekly inperson, or weekly phone interviews. We find high-frequency phone surveys are useful and accurate. Phone and in-person surveys yield similar measurements, with few large or significant differences in reported outcome means or distributions. Neither interview frequency nor medium affects reported outcomes in a common in-person endline. Phone surveys reduce costs without increasing permanent attrition from the panel.