Does Subsidising Business Advice Improve Firm Performance? Evidence from a Large RCT

29.02.2024 12:15 – 13:45

INSTITUTE OF ECONOMICS AND ECONOMETRICS SEMINAR

(jointly with Gonzalo Nunez-Chaim and Capucine Riom)

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.

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