## **D Do Treated Businesses Improve Performance at the Expense of the Control Group?**

A final concern relates to how the gains in sales and profits are achieved. Specifically, are these gains achieved at the expense of the control group? In order to allay this concern, we present two key pieces of evidence. First, a simple comparison of sales and profits for the control group between baseline and endline shows that trends in both these variables are flat. Table 1 shows baseline sales and profits of USD PPP 4,454 and USD PPP 890, respectively. In comparison, Tables 6 and 7 show control group average profits and sales across the endline period of USD PPP 4,999 and USD PPP 895, respectively. Neither of these performance variables are statistically different from baseline to endline, confirming a flat rather than declining growth trajectory.

Second, we use GPS data to directly measure linear distance from each shop in the control group to its nearest shop in the treatment group. If treated shop owners were achieving gains in sales and profits at the expense of the control group, then shops closer by would arguably suffer bigger losses in performance than shops further away. Appendix Table A9 presents a simple regression of sales and profits on this distance measure, with all standard baseline regression controls. The coefficients on both variables are in fact negative and not even close to statistically significant – standard errors are larger than the coefficients for both variables.

Both these pieces of evidence suggest that the gains in performance were, in fact, not achieved at the expense of the control group.<sup>25</sup>

# **VI Conclusion**

This paper shows that it is possible to stimulate efficiency and growth among small firms by sharing information on the best practices of successful local business peers. The analysis finds that the delivery channel of this information is critical – pure information alone does not have an impact on the adoption of business practices or on performance, but combining it with simple and inexpensive experiential add-ons results in sizable and significant improvements on both dimensions. These effects persist up to 18 months after the interventions, which is indicative of their long-term durability.

This study is remarkable in terms of cost-effectiveness, scalability, and replicability. First, the cost per firm of the _Handbook_ intervention is approximately USD 100 and the _Documentary_ and _Assistance_ cost an additional USD 25 each; the benefits are up to USD 310 **per month** in profits, along with a high adoption rate of efficient business practices. Second, because of the low cost of the interventions, this study is easily scalable. Much of the cost is fixed and sunk, particularly the cost of developing the handbook. For any scale-up, the costs would therefore be considerably lower. Third, the concept of learning, processing, and sharing best practices can easily be replicated to other businesses in other countries, and it can also be applied to any other sector where best practices can be helpful, such us in education, health, government, or academia.

Finally, we pose an open and provocative question for future research: can learning local best practices from peers complement or substitute for formal business training? Clearly, we do not have experimental variation in our study to address this question, but we hypothesize that the answer may vary depending on the stage of business development. For example, relatively young

> 25Note that we do not have data on all firms in the study area so cannot rule out general equilibrium effects elsewhere. As in most field studies of this type, we acknowledge that our results represent a partial equilibrium.

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