Working Paper: NBER ID: w21132
Authors: Marcel Fafchamps; Simon R. Quinn
Abstract: We run a novel field experiment to link managers of African manufacturing firms. The experiment features exogenous link formation, exogenous seeding of information, and exogenous assignment to treatment and placebo. We study the impact of the experiment on firm business practices outside of the lab. We find that the experiment successfully created new variation in social networks. We find significant diffusion of business practices only in terms of VAT registration and having a bank current account. This diffusion is a combination of diffusion of innovation and simple imitation. At the time of our experiment, all three studied countries were undergoing large changes in their VAT legislation.
Keywords: Manufacturing; Networks; Field Experiment; Management Practices; Africa
JEL Codes: D22; L26; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Peer networks (D85) | Diffusion of management practices (VAT registration and having a bank account) (H25) |
| Peer adoption of practices at baseline (C92) | Individual adoption of practices (VAT registration and having a bank account) (H25) |
| Randomized assignment of managers to judging committees (C78) | Significant changes in the probability of creating network links among judges (D85) |