Shreya
Kankanhalli

Despite their potential to advance financial inclusion and improve business outcomes, digital payment solutions have low adoption rates among retail merchants in developing economies. Prior interventions have tackled prepurchase frictions such as awareness and affordability, showing limited success. We instead examine postpurchase frictions in the merchant onboarding journey, focusing on installation complexity and value uncertainty. We implement a randomized field experiment with 479 cash-only retailers in Mexico, testing interventions modeled on customer success management, a marketing function widely used by business-to-business technology companies to onboard and retain clients, but not previously examined causally. In the first treatment group, we tackle installation complexity by introducing a customer success manager to support system integration for a provided digital payment solution. In the second treatment group, we further tackle value uncertainty by adding a second customer success manager to support value realization. Relative to the control group, long-term adoption increased by 21.4 percentage points in the first treatment and by an additional 13.4 points in the second. Mechanism evidence shows that system integration primarily operates on the extensive margin of ensuring a functioning device in-store and substitutes for missing digital capacity. By contrast, value realization operates on the intensive margin of usage and complements existing digital capacity. Cost-benefit and spillover analyses support the scalability of our interventions.

This article studies the impact of business modernization on the sales performance of traditional retailers in an emerging market. We define modernization as the adoption of physical structures and tangible practices of organized retail chains, such as exterior signage with store name and logo or a database to record product-level information. We implement a randomized field experiment in Mexico City with 1,148 retailers. The sample is randomized as follows: 385 firms are externally modernized in ways that are visible to customers, 383 firms are internally modernized in ways that are not visible to customers, and 380 firms form a control group. We find a significant and persistent main effect of modernization on sales. Firms in both treatment groups increase monthly sales by 15% to 19% 24 months after study recruitment. Externally modernized firms improve their store-level branding, while internally modernized firms strengthen their product management. Exploratory analysis suggests that it is most useful to modernize a firm's exterior appearance, customer engagement methods, demand analysis, and stock-ordering processes.

Households that send members to work away from home often receive information about lifestyles and consumption behaviors in those migration destinations, or social remittances, along with money or goods, or economic remittances. We investigate the effect of having a migrant household member on household brand expenditures in rural India, a market characterized by substantial consumption of unbranded products. We collect and analyze household-level survey data from 434 households across 30 villages using an instrumental variable strategy. Economic remittances result in greater brand expenditure, and this level is higher for poorer households. After controlling for economic remittances, the effect of migration on brand expenditures is more positive for households in more populous villages, with greater access to mobile phones, lower television viewership, and less recently departed migrants. We show how marketing resource allocation across villages can be improved by incorporating migration data and provide insights for household targeting in door-to-door selling. The results are robust to alternative public-policy-based instruments and generalize to expenditure on private schools. Using additional survey data from 300 households in 62 new villages, we replicate the results by comparing within-household brand expenditures before and after migration.

Large companies are increasingly dominating the retail industry, casting doubt on the future of traditional retail. What product strategy should local stores follow to attenuate this negative impact? We show that, in response to increasing penetration of large chain stores, independent retailers, especially smaller ones, optimally follow a strategy of defensive specialization. The arrival of large stores hurts all independent local stores, but it especially hurts general stores selling multiple categories. Our empirical evidence, built on two large retail datasets from Mexico, confirms the predictions of the theoretical model: specialty stores are better able to cope with the shock of large-chain entry. Moreover, the entry of a large chain induces a shift toward greater specialization in the traditional retail sector, both through an increase in the number and market share of specialty stores and through changes in product offerings within stores.

Migrants own and operate a substantial share of the world's retail firms, yet their national identity may generate demand frictions that constrain firm performance. We provide the first estimates of consumer penalties against migrant-owned firms using a two-sided empirical strategy in Johannesburg, South Africa. On the demand side, we implement an incentivized discrete-choice survey experiment with 1,973 consumers. We randomize owner nationality alongside price, brand, and quality attributes, with an embedded information treatment to disentangle taste-based aversion from statistical discrimination. We complement this demand estimation with a supply-side census of 456 retail firms in the same market. Consumers are willing to pay a 7.68% price premium to avoid a migrant-owned store, even conditional on disclosed store quality. This residual penalty rises sharply with anti-migrant attitudes but is unrelated to consumers' quality beliefs and is not greater for perishable products. On the supply side, migrant-owned stores charge 0.35 standard deviations lower prices on identical, branded products than matched local competitors. Together, the findings establish that identity-based consumer penalties distort equilibrium prices and compress profit margins for migrant entrepreneurs.

This paper formalizes and documents a persistent “gender program gap” where female entrepreneurs derive null or lower returns from business support programs (e.g., business training, consulting, and coaching programs) compared to male entrepreneurs across markets and programs. We develop a conceptual framework to identify constraints underlying the gender program gap and introduce a new targeting tool, the Program Readiness Scorecard (PRS), to tackle this gender program gap. We combine data from three randomized controlled trials in Uganda, Mexico, and South Africa to show that targeting offers of business support programs to female entrepreneurs with top-quartile PRS scores ensures these entrepreneurs achieve robust profit and sales gains from programs on par with average male entrepreneurs in the same sectors, while lower-PRS women experience no gains. This targeting approach can be implemented via a short screening survey and outperforms machine-learning-based targeting methods. Finally, we discuss a roadmap for remedial interventions to help more female entrepreneurs become “program-ready” and realize stronger returns from business support programs.

Despite considerable global investment in programs to incentivize digital payment adoption among small retail merchants, rigorous evidence on program returns remains sparse. We conduct a large-scale randomized evaluation of payment digitization policy programs, co-designed with government and private-sector partners, that offer technology grants, B2C marketing support, and extra financial incentives to small retail merchants in Guadalajara, Mexico. Two years post-intervention, we find significant improvements in sales and profits across treatment groups. Mechanism analyses show that performance gains stem from three channels: an upgraded customer base, including more lucrative segments; increased working capital from reduced diversions and better access to formal banking; and spillovers to usage of other digital tools for customer outreach. Our findings underscore how well-designed payment digitization programs can yield substantial performance gains for small retailers, informing ongoing debates on how best to accelerate payment digitization in developing economies.