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Out of the shadow: Encouraging online registration of micro and small businesses through a randomized controlled trial

Author

Listed:
  • Sarah Xue Dong
  • Dewi Meisari
  • Banu Rinaldi

Abstract

This paper presents the findings of a large scale randomized controlled field trial that informs micro and small businesses about a free and easy to use online registration portal for business registration. We find that in the context of Indonesia, a country with a large informal sector and complicated business registration process, simple online registration can be attractive to micro and small businesses. Sending three rounds of short WhatsApp or text messages resulted in 3.4% of recipients clicking the registration link in the messages. Only 0.1% of recipients registered through the portal, however, indicating that the registration portal is not easy enough to use. Different phrasing of messages results in different click rate, different registration rate, and different rates the sender’s number is blocked. Neutral message performs the best, followed by message that emphasize that registration is easy. Message that appeals to people’s patriotic feelings or message that emphasize the registration is free performs the last, depending on the outcome.

Suggested Citation

  • Sarah Xue Dong & Dewi Meisari & Banu Rinaldi, 2021. "Out of the shadow: Encouraging online registration of micro and small businesses through a randomized controlled trial," Departmental Working Papers 2021-05, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2021-05
    as

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    File URL: https://acde.crawford.anu.edu.au/sites/default/files/publication/acde_crawford_anu_edu_au/2021-03/acde_td_dong_2021_05.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    business registration; micro and small enterprises; informal sector; randomized controlled trial; behavioural insights;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O29 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Other

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