Barriers to Market Access : Experimental Tests of Supply- and Demand-Side Strategies

Expanding market access via digital technologies is seen as a key pathway for growth, yet adoption remains low among small enterprises. This paper investigates barriers to entry through two randomized experiments in the country of Georgia. The findings show that a "supply-side" training intervention failed to increase digital participation, despite high initial interest. In contrast, a "demand-side" conditional purchase order increased market access by 24 percentage points, while a payment six times larger generated only a modest additional increase. The analysis finds no complementarity between training and demand incentives. The results highlight demand-side incentives as a cost-effective policy to kickstart adoption. Although the effects largely dissipate over time as control firms catch up, firms with higher baseline readiness for e-commerce remain more likely to engage in digital markets several years later, with suggestive evidence that the demand shock accelerated adoption among this group. The paper shows that the remaining barriers to growth are likely behavioral and organizational frictions rather than simple skill or capital deficits.