Bruhn-Karlan-Schoar Randomized Consulting Trial for SMEs in Puebla

Small and medium enterprises in Puebla, Mexico, generally lacked access to affordable, high-quality management consulting and showed weak baseline management practices.
Innovations for Poverty Action, working with academic researchers Bruhn, Karlan and Schoar, randomly assigned 432 SMEs either to receive a year of subsidized professional consulting — covering marketing, financial accounting and long-term business planning — or to a control group with no consulting.
A one-year follow-up survey found treated firms' monthly sales up about 80% and profits and total-factor productivity up about 120% relative to controls, alongside gains in owners' self-reported entrepreneurial confidence; a later follow-up using Mexican social-security records found employment and total wage-bill gains of roughly 50% persisting five years after the programme ended.
Effects were highly uneven across firms, concentrated in marketing, accounting and planning practices rather than every area tested, and the short-run study did not find a significant increase in the number of workers employed, so the large percentage gains partly reflect the very low productivity baseline of many participating micro and small firms.

Read the full analysis: https://dspace.mit.edu/server/api/core/bitstreams/82551722-bf42-4213-a03b-434f85515d48/content