Which Businesses Enroll in Innovation Training? Evidence from a Field Experiment

49 Pages Posted: 16 Feb 2022

See all articles by Pascale Crama

Pascale Crama

Singapore Management University - Lee Kong Chian School of Business

Sharique Hasan

Duke University - Fuqua School of Business

Reddi Kotha

Singapore Management University - Lee Kong Chian School of Business

Vish Krishnan

University of California, San Diego (UCSD) - Rady School of Management

Cintia Kulzer Sacilotto

Singapore Management University, Lee Kong Chian School of Business, Students

Chon-Phung Lim

Singapore Management University - Lee Kong Chian School of Business

Date Written: January 14, 2022

Abstract

We report results from a field experiment testing hypotheses that examine what drives firms to seek new learning opportunities. Specifically, we draw on behavioral theory of the firm to predict how prior performance affects the likelihood a firm enrolls in business training. We also evaluate cognitive mechanisms connecting recruitment messaging and CEO growth orientation to firm participation. Our study randomly allocates over 10,000 firms to one of three experimental conditions—prevention, pro-motion, and neutral messaging—that vary the framing of a recruitment message for an innovation program for small and medium enterprises (SMEs) in Singapore. We lever-age pre-treatment heterogeneity in firm performance and CEO orientation to better understand the differential impact of the three message types. We find that businesses with declining performance are 64% more likely to register than those with performance improving year over year. In addition, we find mixed evidence of a congruence effect—where messages (i.e., promotion) resonate more with CEOs with matching orientations. Surprisingly, we find that the neutral messaging performs 46% better than the promotion message and 115% better than the prevention message in spurring enrollment. Our work sheds light on both the frictions and remedies for scaling up the diffusion of new knowledge to businesses. Specifically, we find that subtle differences in recruitment strategy affect who enrolls and the overall demand for business training. Overall, our findings suggest that targeted firm performance-heterogeneity and the varied experimental recruitment efforts significantly affect enrolment. Researchers must pay careful attention to selection in attempting to understand who benefits from the training.

Keywords: Field experiment, Innovation training, Behavioral Theory of the Firm, Sampling

Suggested Citation

Crama, Pascale and Hasan, Sharique and Kotha, Reddi and Krishnan, Vish and Kulzer Sacilotto, Cintia and Lim, Chon-Phung, Which Businesses Enroll in Innovation Training? Evidence from a Field Experiment (January 14, 2022). Available at SSRN: https://ssrn.com/abstract=4034145 or http://dx.doi.org/10.2139/ssrn.4034145

Pascale Crama (Contact Author)

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

Sharique Hasan

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

Reddi Kotha

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

HOME PAGE: http://www.business.smu.edu.sg/Faculty/management/reddikotha.asp

Vish Krishnan

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

Cintia Kulzer Sacilotto

Singapore Management University, Lee Kong Chian School of Business, Students ( email )

469 Bukit Timah Road
Singapore
Singapore

Chon-Phung Lim

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

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