Lean on me, firm: evidence from a management consulting program

This paper evaluates the effects of the More Productive Brazil Program (BMP) which provided subsidized on-site management consultancies about lean manufacturing techniques to 3000 establishments between 2016 and 2018. The BMP was restricted to four manufacturing sectors but included large, medium, and small-sized establishments. We apply two-way fixed effects regressions and event study specifications to estimate the impact of the treatment on participants’ employment size and export performance. Using administrative data from the universe of Brazilian establishments shows evidence of self-selection into the program because the participants have above-average growth rates before the treatment. When compared to different control groups for which the parallel trends assumption holds, we find that the 120-h management consulting tends to boost employment, with increases ranging from 4 to 17% depending on the sample matching approach. These positive employment effects are decreasing with establishment size. Furthermore, export volume, the number of export products, and destination countries grow by about 10%. Our findings support the notion that short-term, low-cost management consulting can be an effective development for exporters and small companies in a real, non-experimental setting.