The Impact of Consulting Services on Small and Medium Enterprises: Evidence from a Randomized Trial in Mexico
44 Pages Posted: 20 Apr 2016
Date Written: June 1, 2013
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.
Keywords: Access to Finance, E-Business, Microfinance, Economic Theory & Research, Business in Development
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