The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in Low‐ and Middle‐Income Countries: A Systematic Review

Abstract

This Campbell systematic review assesses the effects of business support services in low‐ and middle‐income countries on firm performance and economic development. The review summarizes findings from 40 studies. Included studies examine interventions targeted at SMEs (two to 250 employees) involving tax simplification, exports and access to external markets; support for innovation policies; support to local production systems; training and technical assistance, and SME financing and credit guarantee programmes. Findings from 40 studies are summarised in the review. These studies present evidence from 18 low‐ and middle‐income countries, with 26 studies analysing programmes in Latin America, six from Asia and five from Africa. On average, business support to SMEs improves their performance, their ability to create jobs, their labour productivity and their ability to invest. The effects on innovation are unclear. Matching grants, technical assistance and tax simplification programmes improve firms' performance and job creation; with technical assistance also improving labour productivity. Export promotion and innovation programmes positively affect exports and innovation, but there is no evidence that they improve performance or job creation. However, the effects of the programmes studied are not very large. Most studies do not include the required data to assess if the programmes are cost effective. Plain language summary BUSINESS SUPPORT SERVICES TO SMALL AND MEDIUM ENTERPRISES SEEM TO IMPROVE FIRM PERFORMANCEThe Campbell review in briefSupport to small and medium enterprises (SMEs) can improve their revenue and profits, their ability to create jobs, labour productivity and their ability to invest. But these effects are not large, and the cost effectiveness of the interventions not known. The effects on innovation are unclear.What is this review about?Large amounts of funding are going towards programmes to support small and medium enterprises (SMEs) in low‐ and middle‐income countries in order to increase revenue and profits, generate employment, and, so, create economic growth and reduce poverty.The Campbell review summarizes evidence of the impact of these programmes on measures of SME performance including revenues, profits, and productivity, as well as the firms' ability to generate employment and their labour productivity.What are the main findings of this review?What studies are included?Included studies examine interventions targeted at SMEs (two to 250 employees) involving tax simplification, exports and access to external markets; support for innovation policies; support to local production systems; training and technical assistance, and SME financing and credit guarantee programmes.Findings from 40 studies are summarised in the review. These studies present evidence from 18 low‐ and middle‐income countries, with 26 studies analysing programmes in Latin America, six from Asia and five from Africa.Do business support services work?On average, business support to SMEs improves their performance, their abi...

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