This dissertation is an examination and exploration into the mechanisms underlying how government business support programs help small and medium size enterprises (SMEs) to grow. Given the investment of public resources for supporting these ventures, it is essential to know whether such programs have a cost-benefit to the businesses and, if so, how to best design these programs for maximum effectiveness and scalability. Whereas prior research has indicated some positive benefits of these programs net of costs and public policies have been expanding these programs for decades by recommending selecting the “best” entrepreneurs (a.k.a. picking winners), there is no clear consensus about the conditions for program effectiveness. Hence this dissertation addresses the question whether the treatment provided by the program is effective in helping SMEs to grow net of the selection process that recruits these entrepreneurs into the program, and net of the costs to deliver these programs. This dissertation analyzes actual program data from the Small Business Development Center (SBDC), a government-sponsored program in the United States. Based on an investigation of over 1,700 ventures that enrolled in the SBDC consulting services, entrepreneurs that received more than five hours of advice were more likely to achieve at least one growth milestone net of selection, with an economic benefit for the United States taxpayer. By exploring effectiveness through two empirical investigations, this study offers theoretical and professional implications for public policy initiatives supporting entrepreneurial growth outcomes. The findings contribute to academic research and policy debate about entrepreneurial growth, the effectiveness of institutional assistance programs, and the underlying mechanisms.
Keywords: Picking winners, business support programs, business advising, entrepreneurial growth, cost-benefit, mechanisms