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Do consultants do anything useful? @TheEconomist once asked. We answered—with data.
Turns out: yes. Strategic consulting does boost productivity. And there's still room to grow.
How do we know? We used administrative data for every firm in Belgium.
#EconTwitter
Gert Bijnens retweeted
Vicepremier @vincent_v_p slaat de nagel op de kop: hervorm flexi-jobs, pak managementvennootschappen aan, vereenvoudig de meerwaardebelasting, herbekijk bedrijfssubsidies, maak verhoogde tegemoetkoming selectiever, harmoniseer de btw-tafieven, sluit fiscale achterpoortjes, responsabiliseer de regio's.
Het algemeen belang, weet je wel?
standaard.be/politiek/vicepr…
Gert Bijnens retweeted
Toni Erdmann und Admin-Daten? Die @faznet bringt's zusammen! @alexwulfers zu unserem neuen Forschungspapier "What Does Consulting Do?" mit @bijneman und @Schoefer_B, indem wir uns mit belgischen Daten anschauen, welche Firmen Consultants nutzen und was passiert, wenn sie das tun
Gert Bijnens retweeted
New CEPR Discussion Paper - DP20501
What Does Consulting Do?
Gert Bijnens @NBB_BNB_FR @NBB_BNB_NL, @simon_jaeger, @Schoefer_B
ow.ly/aU7F50Ww2eJ
#CEPR_IO #CEPR_LE #CEPR_MG #CEPR_OE #EconTwitter
Gert Bijnens retweeted
What does consulting do? marginalrevolution.com/margi…
Gert Bijnens retweeted
What does consulting do?
Lots of strongly held views, very limited data to answer the question.
In new @nberpubs paper, @bijneman @Schoefer_B and I shed light on this question using the first economy-wide data on consulting relationships (based on VAT-based B2B data).
More👇
Gert Bijnens retweeted
Weekend read:
New paper:
"What Does Consulting Do?"
w/ Gert Bijnens, @simon_jaeger
Consulting is a storied but opaque industry.
Our VAT-based B2B data permit the 1st comprehensive study:
Which firms buy consulting?
What happens when they do?
nber.org/papers/w34072
eml.berkeley.edu/~schoefer/s…
Gert Bijnens retweeted
This is easier to believe than the alternative hypothesis that consulting is a longstanding charade that helps provide corporate cover.
New paper:
"What Does Consulting Do?"
w/ Gert Bijnens, @simon_jaeger
Consulting is a storied but opaque industry.
Our VAT-based B2B data permit the 1st comprehensive study:
Which firms buy consulting?
What happens when they do?
nber.org/papers/w34072
eml.berkeley.edu/~schoefer/s…
Gert Bijnens retweeted
Very cool careful paper that shows that management consulting has a direct, positive (but small) effect on businesses in Belgium.
Companies spend 3% of their revenue on engagements, and get "positive effects on labor productivity of 3.6% over five years" and increases in wages.
New paper:
"What Does Consulting Do?"
w/ Gert Bijnens, @simon_jaeger
Consulting is a storied but opaque industry.
Our VAT-based B2B data permit the 1st comprehensive study:
Which firms buy consulting?
What happens when they do?
nber.org/papers/w34072
eml.berkeley.edu/~schoefer/s…
Gert Bijnens retweeted
Are consultants really just a waste of human skin? on.ft.com/4fbo521
Are consultants really utterly pointless? ft.com/content/bacf891f-0398… via @ft
Gert Bijnens retweeted
Contrary to the trope that consultants borrow your watch to tell you the time (and keep it) or the assumption they’re hired for internal political reasons, ingenious research by @bijneman et al finds they boost profitability (and not at workers’ expense):
buff.ly/KE6ftQC
Gert Bijnens retweeted
This is a really exciting paper. Since consultants are often hired by failing firms, we will get biased estimates if we approach it naively. RCTs are incredibly expensive. They use super detailed firm data plus diff-in-diff, which is honestly fairly convincing.
New paper:
"What Does Consulting Do?"
w/ Gert Bijnens, @simon_jaeger
Consulting is a storied but opaque industry.
Our VAT-based B2B data permit the 1st comprehensive study:
Which firms buy consulting?
What happens when they do?
nber.org/papers/w34072
eml.berkeley.edu/~schoefer/s…
Gert Bijnens retweeted
Super cool paper!
New paper:
"What Does Consulting Do?"
w/ Gert Bijnens, @simon_jaeger
Consulting is a storied but opaque industry.
Our VAT-based B2B data permit the 1st comprehensive study:
Which firms buy consulting?
What happens when they do?
nber.org/papers/w34072
eml.berkeley.edu/~schoefer/s…
Gert Bijnens retweeted
Companies that hire consulting firms see large increases in labor productivity and also large increases of wages, with no decline in labor share or value added.
It seems like a lot of the more nihilist theories of why companies hire consultants are not true on average!
New paper:
"What Does Consulting Do?"
w/ Gert Bijnens, @simon_jaeger
Consulting is a storied but opaque industry.
Our VAT-based B2B data permit the 1st comprehensive study:
Which firms buy consulting?
What happens when they do?
nber.org/papers/w34072
eml.berkeley.edu/~schoefer/s…
Gert Bijnens retweeted
I’ve been waiting for someone to write this paper, glad to see this all-star team pull it off.
Looks like consulting does add direct value, contrary to what many academics (including myself) have thought.
(My prior was consulting solved agency issues w/in firms).
New paper:
"What Does Consulting Do?"
w/ Gert Bijnens, @simon_jaeger
Consulting is a storied but opaque industry.
Our VAT-based B2B data permit the 1st comprehensive study:
Which firms buy consulting?
What happens when they do?
nber.org/papers/w34072
eml.berkeley.edu/~schoefer/s…
Gert Bijnens retweeted
Great new paper which finds that—against the snark—management consulting does make firms more productive (at least in Belgium).
New paper:
"What Does Consulting Do?"
w/ Gert Bijnens, @simon_jaeger
Consulting is a storied but opaque industry.
Our VAT-based B2B data permit the 1st comprehensive study:
Which firms buy consulting?
What happens when they do?
nber.org/papers/w34072
eml.berkeley.edu/~schoefer/s…
Gert Bijnens retweeted
New paper:
"What Does Consulting Do?"
w/ Gert Bijnens, @simon_jaeger
Consulting is a storied but opaque industry.
Our VAT-based B2B data permit the 1st comprehensive study:
Which firms buy consulting?
What happens when they do?
nber.org/papers/w34072
eml.berkeley.edu/~schoefer/s…