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

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  • Nunez Chaim, Gonzalo Ignacio
  • Overman, Henry George
  • Riom, Capucine Anne Veronique

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.

Suggested Citation

  • Nunez Chaim, Gonzalo Ignacio & Overman, Henry George & Riom, Capucine Anne Veronique, 2024. "Does subsidising business advice improve firm performance? Evidence from a large RCT," LSE Research Online Documents on Economics 126834, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:126834
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    More about this item

    Keywords

    firm performance; enterprise growth; entrepreneurship; industrial strategy;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General

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