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Randomized Controlled Trials in the Middle East and North Africa

Paper Session

Saturday, Jan. 7, 2017 3:15 PM – 5:15 PM

Sheraton Grand Chicago, Millennium Park
Hosted By: Middle East Economic Association
  • Chair: Mahdi Majbouri, Babson College

Exporting and Firm Performance: Evidence from a Randomized Experiment

David Atkin
,
Massachusetts Institute of Technology
Amit Khandelwal
,
Columbia University
Adam Osman
,
University of Illinois-Urbana-Champaign

Abstract

We conduct a randomized control trial that generates exogenous variation in the access to foreign markets for rug producers in Egypt. Combined with detailed survey data, we causally identify the impact of exporting on profits and productivity. Treatment firms report 16-26 percent higher profits and exhibit large improvements in quality alongside reductions in output per hour relative to control firms. These findings do not simply reflect firms being offered higher margins to manufacture high-quality products that take longer to produce. Instead, we find evidence of learning-by-exporting whereby exporting improves technical efficiency. First, treatment firms have higher productivity and quality after controlling for rug specifications. Second, when asked to produce an identical domestic rug using the same inputs and same capital equipment, treatment firms produce higher quality rugs despite no difference in production time. Third, treatment firms exhibit learning curves over time. Finally, we document knowledge transfers with quality increasing most along the specific dimensions that the knowledge pertained to.

Evaluating the Effects of Entrepreneurship Edutainment in Egypt

Ghada Barsoum
,
American University in Cairo
Bruno Crepon
,
CREST
Drew Gardiner
,
International Labour Organization
Bastien Michel
,
Aarhus University
William Pariente
,
University Catholic Louvain

Abstract

We measured the impact of an edutainment program designed to promote entrepreneurship in young adult viewers and broadcast on one of the most popular Egyptian television channels. To this end, 6,836 young individuals interested in entrepreneurship were selected using a Random-Digit-Dialing method, and 2,441 of their friends were also added to the sample to study the importance of spillover effects. We implemented a randomized controlled trial following a non-symmetric encouragement design and found that while the show had a limited impact on entrepreneurship-related outcomes, the content of the show changed viewers’ opinions in relation to entrepreneurship. The impact of the intervention appeared particularly important on gender-related outcomes. Furthermore, we put in evidence complex outcome-specific spillover effects alternately amplifying and mitigating the direct effect of one’s exposure the intervention.

Understanding Demand for Sharia-Compliant Financial Products

Dean Karlan
,
Yale University
Adam Osman
,
University of Illinois-Urbana-Champaign
Nour Shammout
,
Poverty Action Lab

Abstract

Low utilization of credit in developing countries may be partially due to a lack of products that suit the needs of borrowers in their local context. We consider one such cause of low take up by estimating the demand for a new sharia-compliant microcredit product in Jordan. To comply with the Islamic prohibition on paying or receiving interest, the new product uses a bank fee structure, while keeping the economics of the product the same as a comparative conventional loan. We find that in this largely Muslim country, those offered a sharia-compliant loan increase their application rate from 18% to 22%. There is no differential response to variations in the sharia-compliant certifying entity. We also varied the price of the sharia-compliant product, and find that those who are more religious are less price elastic, and that being more religious increases demand for sharia-compliant loans as much as decreasing the cost of the loan by 16%.

Selection into Job Training Programs

Jamin Speer
,
University of Memphis

Abstract

Many social programs with seemingly high benefit to cost ratios have puzzlingly low takeup rates. We run an experiment with a job training organization in Egypt that provides highly subsidized training to low income youth. We randomize the information provided to potential trainees, as well as the monetary and nonmonetary costs of the program. This allows us to better understand the determinants of demand for job training programs, as well as how different types of recruitment strategies can lead to variation in the type of applicants that utilize the social program.
JEL Classifications
  • D0 - General
  • R0 - General