Social Learning among Urban Manufacturing Firms: Energy-Efficient Motors in Bangladesh

Investigators: CDEP Co-Director Eric Verhoogen, Ritam Chaurey, Siddharth Sharma, and Gaurav Nayyar

This project has conducted a randomized control trial on the determinants of adoption of an energy-efficient technology in the Bangladeshi manufacturing sector. The technology is a new motor for stitching machines, called a “servo” motor, which uses about 75% less electricity than traditional “clutch” motors. The researchers provided information about the servo motors in varying intensities to managers of small and medium-sized enterprises in the leather goods and footwear industry in Dhaka. In one arm, they installed a servo motor on one machine and electricity meters on that machine and a machine with a clutch motor. In another arm, they only provided information about the servo motor. A third group served as a control. In all three groups, the researchers are tracked adoption of the new motors and knowledge flows between firms. The researchers find strong evidence of knowledge spillovers: having an intensively treated neighbor within 500 meters walking distance increase the probability of adopting a new motor by about 20%. Having a treated neighbor had a larger effect on firms than being shown an informational video about the new motors.

View the working paper presenting the results.

The project has been funded by the J-PAL King Climate Action Initiative, the International Growth Centre, the Private Enterprise Development in Low-Income Countries (PEDL) initiative, and the Templeton World Charity Foundation.