Would You Invest More? What Enterprises Reveal in a Randomized Experiment

This study examines the impact of business environment factors and their interactions on enterprises’ investment decisions. A field experiment that combines a randomized conjoint experiment (RCE) with a randomized controlled trial (RCT) is conducted to investigate 543 enterprise owners and managers in Vietnam. The RCE includes four business environment attributes: informal sector, administrative procedure, training provision, and informal payment. The RCT randomly assigns support for access to finance as the treatment to test the effects of its interactions with the RCE attributes on the decisions made by enterprises. The results reveal that, contrary to the findings reported by observational data-driven studies, informal payment substantially affects enterprises’ decisions, such that its elimination increases their choice probabilities by 61 percentage points. Notably, the interaction between financial access support and the informal sector or informal payment entails significant shifts in enterprises’ choices. This study provides causal evidence regarding how specific business environment factors and their interactions influence investment decisions, particularly among enterprises, a group that has often remained underexplored in experimental research. The findings highlight the need for coordinated reforms that prioritize anti-corruption and align financial access support with broader institutional improvements to promote investment.