Providing management consulting services to Small and Medium Entreprises in Mexico improves firm performance and managerial confidence

Based on a randomized control trial with 432 SMEs in Puebla Mexico, Bruhn et al. (2013) show that providing them with access to consulting services to increase their managerial capital led to better firm performance: within one year after the program treatment, firms reported positive effects on return on assets and total factor productivity. Owners also showed large increases in their entrepreneurial spirit, measured by a managerial confidence index. Further, the researchers find a large increase in the number of employees and total wage bill for the treatment group two to three years after the program. 

By Miriam Bruhn, Dean Karlan and Antoinette Schoar (2013)