Curating Local Knowledge: Experimental Evidence from Small Retailers in Indonesia

A-Tier
Journal: Journal of the European Economic Association
Year: 2021
Volume: 19
Issue: 5
Pages: 2622-2657

Score contribution per author:

1.005 = (α=2.01 / 4 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Business practices and performance vary widely across businesses within the same sector. A key outstanding question is why profitable 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 diffusion 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.

Technical Details

RePEc Handle
repec:oup:jeurec:v:19:y:2021:i:5:p:2622-2657.
Journal Field
General
Author Count
4
Added to Database
2026-01-25