This study develops a Randomized Control Trial (RTC) design and uses a Dif-Dif methodology to evaluate the causal effect of Avanza program on business performance. Avanza is a tailor-made advice and training program for SME in Venezuela; it will be implemented by Ideas Foundation, an NGO advising entrepreneurs for the last 13 years.
Specifically, the intervention will consist of: 1) Tailored diagnosis based on baseline data and individual interviews to identify main barriers for growth and prepare a one-year work plan; 2) Group seminars on common issues for business owners and managers, according to the goals of their work plan; 3) Six-month advisory services from a senior and a junior consultant based on the diagnosis results .
The selection process consisted in a 3-month-window opened by Ideas Foundation for firms to register. Registration information and eligibility criteria were verified through official records for 338 firms. A comprehensive questionnaire was developed with 176 questions; which was piloted, optimized, and applied in July 2017 to 192 firms that passed the registration filters. This same questionnaire will be improved with results from semi-structured interviews, and applied twice again 2 and 3 years later as a follow-up and final survey, respectively.
A factor analysis (FA) was performed on the baseline survey data to construct treatment groups around common functional dimensions that explained the greater portion of best practices listed in the questionnaire. The FA produced three treatment groups: (a) Monitoring and Planning; (b) Innovation, marketing and training; and (c) Financial practices. Firms were paired according to their lower score in either factor. Once the 96 pairs were established, one firm of each pair was randomly selected to treatment and the other one to control.
This paper aims to complement the evidence by Bruhn et al. (2013) regarding the effect that consulting services have on business performance. In addition, it will use cuantitative and cualitative tools to identify potential mechanisms that can help explain the results. Regarding this, the study will put a special focus in measuring changes in managerial skills, adoption of best practices, and attitudes, since they are all considered importante drivers that can ultimately lead to improvement.