Out of the shadow: Encouraging online registration of micro and small businesses through a randomized controlled trial

Abstract

This paper presents the findings of a large-scale randomized controlled field trial that tests the interest of informal businesses in free and online business registration. In collaboration with the Indonesian government, we designed a free and easy to use online registration portal for small businesses and sent WhatsApp or text messages to around 50 000 businesses to inform them about this new registration portal. We find that sending three rounds of short WhatsApp or text messages resulted in 3.4% of recipients clicking the registration link in the messages. Only 0.1% of recipients registered through the portal. Different phrasing of messages results in different click rate, different registration rate, and different rates the sender's number is blocked. Neutral message performs the best, followed by message that emphasizes that registration is easy. Message that appeals to people's patriotic feelings or message that emphasizes that registration is free performs the last.