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 entrepreneur's' 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.

Policy implications 
Management consulting services can generate high returns in terms of productivity and growth for SMEs, and they can be well worth the cost.
Bruhn, M., Karlan, D., & Schoar, A., 2018. The impact of consulting services on small and medium enterprises: Evidence from a randomized trial in Mexico. Journal of Political Economy, 126(2), 635-687.