Curating Local Knowledge: Experimental Evidence from Small Retailers in Indonesia (Revision of DP 2019-015)

Patricio Dalton, Julius Rüschenpöhler, Burak Uras, Bilal Zia

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Abstract

Business practices and performance vary widely across businesses within the same sector. A key outstanding question is why protable practices do not readily diffuse. We conduct a field experiment among urban retailers in Indonesia to study whether alleviating informational and behavioral frictions can facilitate such discussion in a cost-effective manner. Through quantitative and qualitative fieldwork, we curate a handbook that associates locally relevant practices
with performance, and provides idiosyncratic implementation guidance informed by exemplary local retailers. We complement this handbook with two light-touch interventions to facilitate behavior change. A subset of retailers is invited to a documentary movie screening featuring the paths to success of exemplary peers. Another subset is offered two 30 minute personal visits by a local facilitator. A third group is offered both. Eighteen months later, we find significant
impacts on practice adoption when the handbook is coupled with the two behavioral nudges, and up to a 35% increase in profits and 16.7% increase in sales. These findings suggest both informational and behavioral constraints are at play. The types of practices adopted map the performance improvements to efficiency gains rather than other channels. A simple cost-benefit analysis shows such locally relevant knowledge can be codified and scaled successfully at relatively low cost.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages96
Volume2020-033
Publication statusPublished - 17 Dec 2020

Publication series

NameCentER Discussion Paper
Volume2020-033

Keywords

  • Business Growth
  • Efficiency Gains
  • Small-scale Enterprises
  • Peer Knowledge
  • Self- Learning
  • Social Learning

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