Publicly Funded Business Advisory Services and Entrepreneurial Outcomes

38 Pages Posted: 8 Oct 2009 Last revised: 20 Nov 2014

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

Eileen Fischer

York University - Schulich School of Business

Date Written: October 7, 2009

Abstract

Given the mixed evidence for the impact of various publicly funded initiatives that aim to foster entrepreneurial activity, this paper empirically examines the efficacy of publicly funded business advisory services in relation to entrepreneurial outcomes. Based on a sample of 228 early-stage firms, of which 101 used business advisory services focused on helping companies secure 1st rounds of financing and start generating revenues, we examine the firm-level impact such services can have on sales growth, innovation, finance and alliances. We find services are positively associated with firms’ sales growth, patents, finance and alliances. We assess statistical and economic significance, and assess robustness to controls for the non-randomness of the firm’s matching with the business advisory service program, as well as endogeneity of advisors’ hours spent with firms, among other robustness checks. We find significant robustness of hours spent on sales and finance, but sensitivity of the effect of hours on patents and alliances after controlling for endogeneity.

Keywords: Entrepreneurship, Business Advisory Services, Alliances, Angel Equity Finance, Patents, Public Policy

JEL Classification: L26, L50, M13, O3, G24

Suggested Citation

Cumming, Douglas J. and Fischer, Eileen, Publicly Funded Business Advisory Services and Entrepreneurial Outcomes (October 7, 2009). Research Policy, Vol. 41, 2012, Available at SSRN: https://ssrn.com/abstract=1484891 or http://dx.doi.org/10.2139/ssrn.1484891

Douglas J. Cumming (Contact Author)

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

Eileen Fischer

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

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