Curating local knowledge: Experimental evidence from small retailers in Indonesia

Patricio Dalton, Julius Rüschenpöhler, Burak Uras, Bilal Zia

Research output: Contribution to journalArticleScientificpeer-review

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
JournalJournal of the European Economic Association
DOIs
Publication statusE-pub ahead of print - Feb 2021

Keywords

  • business growth
  • efficiency gains
  • small-scale enterprises
  • peer knowledge
  • self-learning
  • social learning

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