Differential Gains from Business Link Support and Advice: A Treatment Effects Approach

Abstract

The provision of advisory support to small firms is almost ubiquitous in OECD countries, although it is organised in different ways and is justified on slightly different grounds. In England publicly supported advisory services are provided through the Business Link (BL) network. Here, we consider two questions: what sort of companies receive advisory support from BL; and, what types of firms benefit most from that support? Our analysis is based on a telephone survey of 2000 firms, around half of which had received intensive assistance from BL between April and October 2003. Probit analysis suggests that the probability of receiving assistance was greater among younger businesses, those with larger numbers of directors in the firm, and those with more gender diversity among the firm's leadership team. Our business-growth models suggest that BL intensive assistance was having a positive effect on employment growth in 2003. BL had a positive but insignificant impact on sales growth over the period. Employment growth effects tend to be larger where firms have a management and organisational structure, which is more conducive to absorbing and making use of external advice. The analysis suggests that BL might increase its impact through targeting these larger, more export-orientated, businesses. Employment growth effects differ little, however, depending on either the ethnic or the gender diversity of the leadership team.