The Impact of Consulting Services on Small and Medium Enterprises : Evidence from a Randomized Trial in Mexico
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.
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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