The impact of consulting services on small and medium enterprises: Evidence from a randomized trial in Mexico

Miriam Bruhn, Dean Karlan, Antoinette Schoar

Research output: Contribution to journalArticlepeer-review

31 Scopus citations

Abstract

A randomized control trial with 432 small and medium enterprises in Mexico shows positive impact of access to 1 year of management consulting services on total factor productivity and return on assets. Owners also had an increase in “entrepreneurial spirit” (an index that measures entrepreneurial confidence and goal setting). Using Mexican social security data, we find a persistent large increase (about 50 percent) in the number of employees and total wage bill even 5 years after the program. We document large heterogeneity in the specific managerial practices that improved as a result of the consulting, with the most prominent being marketing, financial accounting, and longterm business planning.

Original languageEnglish (US)
Pages (from-to)635-687
Number of pages53
JournalJournal of Political Economy
Volume126
Issue number2
DOIs
StatePublished - Apr 2018

ASJC Scopus subject areas

  • Economics and Econometrics

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