Learning to let go: A field experiment on benchmarking and entrepreneur exit

49 Pages Posted: 6 Apr 2022

See all articles by Yun Hou

Yun Hou

National University of Singapore

Ivan P. L. Png

National University of Singapore (NUS)

Date Written: March 21, 2022

Abstract

Entrepreneurs are reluctant to exit. How does information about peers, specifically, benchmarking, affect exit? To investigate this question, we carried out a randomized controlled trial of benchmarking among 194 food-stall owners in Singapore. Both control and treatment owners were informed of their own performance. Additionally, treatment owners were informed of their relative performance and best practices. The benchmarking treatment induced owners to exit, especially worse-performing owners and business founders. We interpreted the mechanism as being either resolving uncertainty over own ability or correcting escalation of commitment.

Keywords: Business exit; Entrepreneurship; Benchmarking; Field experiment; Peer learning

JEL Classification: L26

Suggested Citation

Hou, Yun and Png, Ivan P. L., Learning to let go: A field experiment on benchmarking and entrepreneur exit (March 21, 2022). Available at SSRN: https://ssrn.com/abstract=4062428 or http://dx.doi.org/10.2139/ssrn.4062428

Yun Hou (Contact Author)

National University of Singapore ( email )

Business Link 1, NUS
01-07, BIZ 2
Singapore, Singapore 117592
Singapore
117592 (Fax)

HOME PAGE: http://sites.google.com/view/yunhou

Ivan P. L. Png

National University of Singapore (NUS) ( email )

Singapore, 117543
Singapore
+65 6516-6807 (Phone)

HOME PAGE: http://sites.google.com/site/iplpng/

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