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

Small and medium enterprises (SMEs), defined in this review as businesses with up to 250 employees, are believed to be both an important tool in the fight against poverty and an important contributor to economic growth in developing countries. SMEs are responsible for the majority of employment generation in developed as well as in developing countries (Ayyagari et al., 2007). Given that SMEs play an important role in the formal labour force, the health of the sector has implications for employment generation policies and growth. Ayyagari et al. (2007) show that formal SMEs are responsible for most of the private sector employment in developed countries - for example, SMEs are responsible for around 60-70 per cent of employment generation in Germany, Finland, Belgium and Canada. However, in African countries SMEs are responsible for a smaller share of formal employment generation, providing only about 20 per cent of employment in Nigeria, Cote d'Ivoire and Cameroon. Ayyagari et al. also note that the SME sector's contribution to employment shows a strong positive correlation with GDP per capita. Thus, the evidence suggests that increasing this sector's contribution to employment might generate growth (Ayyagari et al., 2007; Beck et al., 2005), and therefore that effective business support services may positively affect GDP per capita. African economies have a lower percentage of formal workers in SMEs due to the fact that these economies have a larger (not computed) and less productive informal sector. Thus, in the path towards a more formalised labour market, employment generation by the SME sector plays a very important role. SMEs can further be linked to economic growth through their ability to link knowledge, product commercialisation and total factor productivity (Acs et al., 2009; Solow, 2007). A seminal study using a cross-section of countries to analyse SMEs and growth was provided by Beck et al. (2005), who found a positive but not causal relationship between SMEs and growth. An exploration of other available empirical evidence however, shows that while studies that focus on developed nations suggest a positive impact of SMEs and entrepreneurship on economic growth, studies examining developing countries suggest a negative impact (for example, Audretsch and Keilbach, 2004; Mueller, 2007; Cravo 2010; Cravo et al., 2012; Cravo et al., 2014).1 Acs et al. (2008) have attributed these differences in empirical results to different entrepreneurship responses to institutional arrangements. Moreover, heterogeneity in institutional arrangements is likely to provide different incentives to rent-seeking activities (Baumol, 1990). Thus, the role of SMEs in a given economy can be expected to vary depending on the institutional settings and level of development. Development agencies provide a considerable amount of targeted assistance to SMEs in low-and middle-income country economies (Beck et al., 2006). For instance, the World Bank devoted US$9.8 billion to SME projects during the period 2006–12 (IEG, 2013). For the same period, the support of the International Finance Corporation (IFC) of the World Bank Group directed to SMEs amounted to US $25 billion. However, there is limited evidence on the impact of SME support in the literature, due either to an insufficient number of studies employing convincing identification strategies to isolate the causal impact of the intervention under consideration, or to limited information regarding the mechanism underlying such interventions. This systematic review will draw on economic theory and qualitative studies to uncover the channels through which a particular intervention can affect the outcomes of interest. This research will therefore separate the outcomes into two categories, intermediate and final, wherever possible in order to uncover the theory of change of each intervention. In developing countries, programmes that support SMEs are based on the view that there are institutional constraints that impede SMEs from reaching their full potential to generate jobs and profits. Thus, the large amount of financial resources allocated to the development of the SME sector by governments and development organisations is designed to address institutional failures, and allow SMEs to operate more efficiently, thus leading to productivity growth (Beck et al., 2005).2 Various approaches are used to provide support services to SMEs. These mainly to the institutional and to institutional constraints that these from reaching their full potential and thus to economic growth and poverty on a review of the literature, have the approaches to SME support as to and the business to and and SME and This can be into two support that the constraints that SMEs from to the the impact of business support to SMEs. In the studies the impact of an of support such as which to provide incentives for informal SMEs to underlying is that formal are less their informal and therefore be an effective of are expected to have economies of and be more a more labour force, and have profits. informal are from due to the of the to from the This intervention is an of support is targeted to with informal are to through that to are not other of of studies the impact of business support to SMEs. the impact of a support to SMEs a sector in a with the intervention based on the that SMEs constraints such as a limited of limited and In this SMEs support to the of and A intervention might generate on that not to the of the from other informal in the same sector. This of support in the of support for or and strategies (for example, to address the support the of intervention is the are targeted with programmes that to from a and to a and are and and are by the of productive this review will the impact of a of is to up with a theory of provide a theory of change based on of the in this is with the that each of intervention in the of the is based on an in a particular causal to this theory of change will a on the regarding the causal of each of the in in support to SMEs is to productivity growth and employment the theory of change SME support services is linked to the or of that allow SMEs to their full a more of the theory of change for the intervention to in this as in of change this theory of change are which are to the particular can be as a of business support to SMEs. These through the of theory suggests that formal will be to with to and by of economies of A affect outcomes such as employment and through two intermediate and to causal be as for a the informal in by productivity and to less constraints to growth are of studies that only on however, and on the in such an intervention are given note that the business support that this review may will a of intervention to of for the A review such as this has the potential for given the amount of development agencies and organisations around the have to a of assistance targeted to SMEs and regarding and employment on the economy such as and poverty are also as of such (Beck et al., 2006). However, in of their is about the impact of SME support interventions. In a on SME policies in African countries, shows that African are in with up to employees, but very in of and to also shows that SMEs have in in African countries, of such policies is This is given that the SME sector is of the of and agencies et al., This research to of this by the in the and the results to on this of this review is by the fact that to the evidence on in and therefore be to and organisations in SMEs in the to address with this are the of limited contribution to employment in African countries to other in the contribution to poverty these enterprises may in the African in to larger for impact of business support services suggests the of a considerable number of studies for and and middle-income et al. and and to analyse the of a in on and and and provide evidence on in et al. study the of on workers and other outcomes in using and and and to to and in For the African the available evidence is likely to be more However, a and of the is with a particular focus on to the African with the the of the for impact of support services that there is limited evidence for In of the studies et al. a in to analyse the of SME on and In the of countries as a a considerable amount of evidence is available for and analyse the of an on productivity in using and In study of the et al. analyse the of support on employment and using and also evidence on support for in and middle-income countries. et al. provide evidence of the impact of and support on and in by and a studies analyse different of evidence for for different SME of and on productivity and In et al. study to product and affect productivity using and in countries. most of the a positive of SME support on there is a to review and the evidence to provide an of the impact of these on the evidence to be from to African countries, or other is not due to of that these A of the underlying the causal of an SME intervention is therefore is in SME in different of the of this review is to on the impact of as well as on the that in countries or but in This review has with by and This other however, on employment and business and will not review evidence on such as and to of which are the outcomes of of this these the research will both intermediate such as to and and such as employment generation, productivity and to market, and will for that can the causal of the intervention. that this is a very to be by this systematic In the is to on the potential linked to the institutional and level of development of each of the results to African is not an and the of the systematic however, in order to allow the to the review to a the will and This review will focus only on studies that policies SMEs in low-and middle-income countries defined by the World with an on African countries wherever focus on is private in these countries to be more labour and less and are the of a large of the labour the to to the constraints that SMEs might in institutional such as in African countries. SME a of and from country to country and between the SME of the used are the number of employees, total and level (Ayyagari et al., 2007). most used to SMEs is based on employment due to and the used to SMEs is 250 This review will this of 250 other of only entrepreneurship and the of such as will not be of this This is and have a different in to in are of less productive or informal enterprises of in the of the these enterprises are not to most of the to be in this Thus, the of SME based on number of well of a of and of for African is that there will be only a studies examining in African countries, a of the a of the the and the from to number of in to to the country the intervention will be to this This will allow to be to on the intervention has and in an African In order to address the likely of limited of to the of the review will studies and intermediate This will also the causal which will about to African countries. In the studies will for information on and or not that is by the theory of change in the of an intervention et al., However, focus is not only on the by the intervention but also will the such as to provide incentives for informal SMEs to that formal are less their informal and therefore be an effective to support to SMEs may policies regarding business and et al., and 2012; 2013). to defined as that such as information and SMEs to and 2010; et al., 2010; World for policies is based on the that to private and Acs and designed to support This review will different of support such as and as in the For instance, et al. the of provided an for et al. analyse the impact of and for and et al. the of on of support may also be during the and defined as that from and the that SMEs from these and et al., and defined as that provide support for and based on the that and of workers and to productivity et al., et al., 2007). This of intervention also services and such as by the World Bank et al. and et al. SME and in generate financial which in SME activities (Beck and and 2007; et al., review will in this of that provide or services to such as in World Bank for and in et al. for note that the business support this review may In this will be important to as as there is a will be using information on intervention however, this may not be possible only a number of are the of knowledge, most of the the impact of a targeted to SMEs a with a in the of However, will be studies that and from studies that have more two will also separate the evidence to the intervention In the of for instance, an intervention can a an or et al., have two different and and in of different different of and studies on impact to with either or For the of this will to to such as number of workers and to of will be on and will be outcomes of SME support around and growth and therefore can be and are of studies that to in the review these et in to analyse the of SMEs on and and study of the of an on productivity in et of the of support on employment and in of different SMEs for and on productivity and and et study of the of and support on and in outcomes vary to the of but can be defined to policies the and growth. 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