Business Advisory Services and Innovation during Pandemic Times: Evidence from Small Businesses*

31 Pages Posted: 15 Jun 2022

See all articles by Juan Acevedo

Juan Acevedo

Universidad de los Andes, Chile - School of Business and Economics

Ivan Diaz-Molina

ESE Business School

Sofia Johan

Florida Atlantic University - Finance; University of Vaasa; Tilburg Law and Economics Center (TILEC)

Patricio Valenzuela

Universidad de los Andes, Chile

Date Written: June 14, 2022

Abstract

State-sponsored business advisory services face pressure to demonstrate value-added effects among their assisted firms. We employ a unique survey to measure the effectiveness of a business advisory program in promoting innovation in small businesses during the COVID-19 pandemic. We also seek to determine the role of innovation in mitigating the negative effects of the pandemic on enterprises’ closure, sales, and job creation. We observe a large likelihood of innovation and a lower likelihood of closure by assisted enterprises. We also find a reduction in sales and employment during the pandemic. These negative effects are mitigated in businesses that implemented innovations such as online sales, delivery, commercialization through internet channels, and the creation of new products and/or services during the pandemic. The effects of the pandemic and induced innovation are more pronounced in family businesses than in non-family businesses. This finding suggests small family firms are both more vulnerable to crises and benefit more from innovation.

Keywords: entrepreneurship, innovation, pandemic, small businesses

JEL Classification: D22, D24, L26, M13, O31, O32

Suggested Citation

Acevedo, Juan and Diaz-Molina, Ivan and Johan, Sofia A. and Valenzuela, Patricio, Business Advisory Services and Innovation during Pandemic Times: Evidence from Small Businesses* (June 14, 2022). Available at SSRN: https://ssrn.com/abstract=4136585 or http://dx.doi.org/10.2139/ssrn.4136585

Juan Acevedo

Universidad de los Andes, Chile - School of Business and Economics ( email )

Chile

Ivan Diaz-Molina

ESE Business School ( email )

av. plaza 1905
las condes
Santiago, 7620074
Chile
+56226181535 (Phone)

HOME PAGE: http://www.ese.cl

Sofia A. Johan

Florida Atlantic University - Finance ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://sites.google.com/view/sofiajohan

University of Vaasa ( email )

P.O. Box 700
Wolffintie 34
FIN-65101 Vaasa, FI-65101
Finland

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Patricio Valenzuela (Contact Author)

Universidad de los Andes, Chile ( email )

Mons. Álvaro del Portillo
Las Condes
Santiago, 12.455
Chile

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