Learning Business Practices from Peers: Experimental Evidence from Small-scale Retailers in an Emerging Market

Patricio Dalton, Bilal Zia, Julius Rüschenpöhler, Burak Uras

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Abstract

This paper studies whether small-scale businesses can learn and adopt protable practices of their successful peers. We identify such practices through a detailed business survey in urban Indonesia and disseminate the information to a randomly selected sample of small retailers through a professionally developed handbook. An orthogonal subgroup is provided additional support through business role models, and another through individualized business counseling. We find a significant increase in the adoption of profitable practices in all sub-groups of retailers. Moreover, while the handbook alone does not lead to significant performance gains, we find that supplementary role models and business counseling improve sales and profitability. The channels of impact differ, with role model recipients learning practices by observing while
counseling recipients learning practices by doing. These findings show that business growth can be achieved through innovative and simple channels that are cost effective and scalable.
Original languageEnglish
Place of PublicationTilburg
PublisherTilburg University
Number of pages87
Publication statusPublished - Feb 2018

Publication series

NameDFID Working Paper

Keywords

  • business practices
  • small-scale enterprises
  • peer effects
  • innovation
  • role models
  • social learning
  • business counseling

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