Using a randomized evaluation with 432 Mexican small and medium enterprises, this paper shows that access to management consulting led to better firm performance: one-year results show positive effects on return-on-assets and total factor productivity. Owners also had large increases in "entrepreneurial spirit" (an entrepreneurs' managerial confidence index). Using Mexican social security data, the analysis finds a large increase in the number of employees and total wage bill several years after the program. The paper documents large heterogeneity in the specific managerial practices that improved as a result of the consulting, but there is no singular mechanism as a panacea for all firms.
Details
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Author
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Document Date
2013/06/01
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Document Type
Policy Research Working Paper
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Report Number
WPS6508
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2013/06/01
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Disclosure Status
Disclosed
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Doc Name
The impact of consulting services on small and medium enterprises: evidence from a randomized trial in Mexico
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Keywords
Finance & Private Sector Development;small and medium enterprise;Consulting services;small and medium size enterprise;treatment group;average number of employees;return on asset;standard deviation;total wage bill;credit market failure;average daily wage;years of schooling;journal of finance;points of sale;total factor productivity;impact on productivity;competitive bidding process;annual wage bill;human resource management;impact on sales;social security administration;number of workers;impacts on employment;risk taking ability;regression of log;constraints to entrepreneurship;business practice;treatment effect;managerial skill;commerce sector;firm performance;management consulting;entrepreneurial spirit;business performance;firm size;micro enterprise;confidence interval;manufacturing sector;record keeping;robustness check;
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Citation
Bruhn,Miriam Karlan,Dean S. Schoar,Antoinette
The impact of consulting services on small and medium enterprises: evidence from a randomized trial in Mexico (English). Impact Evaluation series ; no. IE 95,Policy Research working paper ; no. WPS 6508 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/516471468278741470/The-impact-of-consulting-services-on-small-and-medium-enterprises-evidence-from-a-randomized-trial-in-Mexico