Publicly Funded Business Advisory Services and Entrepreneurial Outcomes
38 Pages Posted: 8 Oct 2009 Last revised: 20 Nov 2014
Date Written: October 7, 2009
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: Suggested Citation