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The impact of consulting services on small and medium enterprises: evidence from a randomized trial in Mexico
 
Author:Bruhn, Miriam; Karlan, Dean; Schoar, Antoinette; Collection Title:Policy Research working paper ; no. WPS 6508Impact Evaluation series ; no. IE 95
Country:Mexico; Date Stored:2013/06/26
Document Date:2013/06/01Document Type:Policy Research Working Paper
Language:EnglishRegion:Latin America & Caribbean
Report Number:WPS6508SubTopics:Access to Finance; Economic Theory & Research; Business in Development; Microfinance; E-Business
Volume No:1 of 1  

Summary: 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.

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