Does subsidising business advice improve firm performance? Evidence from a large RCT

Nunez Chaim, Gonzalo Ignacio ORCID: 0000-0001-6011-4657, Overman, Henry George ORCID: 0000-0002-3525-7629 and Riom, Capucine Anne Veronique (2024) Does subsidising business advice improve firm performance? Evidence from a large RCT. CEP Discussion Papers (CEPDP1977). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

We evaluate the impact of the UK's Growth Vouchers Programme, which offered subsidised business advice to 15,207 randomly selected small and medium size enterprises. Using administrative and survey data, we show that the programme increased turnover by 8.2% but only in the short-term and potentially at the expense of non-supported firms. We find that subsidised advice appears to improve firms' capabilities and practices in a way that is consistent with the increase in turnover. We also demonstrate that propensity score matching introduces a sizeable upward bias to estimated effects on turnover and employment and that this bias grows over time.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2024 The Author(s)
Divisions:	What Works Centre Geography & Environment
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HF Commerce H Social Sciences > HB Economic Theory
JEL classification:	D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital and Total Factor Productivity; Capacity L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M13 - Entrepreneurship O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General D - Microeconomics > D2 - Production and Organizations > D20 - General
Date Deposited:	19 Feb 2025 11:51
Last Modified:	19 Feb 2025 12:03
URI:	http://eprints.lse.ac.uk/id/eprint/126834

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