Who benefits most? The effects of managerial assistance on high- versus low-performing small businesses Joo Hwan Seo a, ⁎, Vanessa G. Perry a , David Tomczyk b , George T. Solomon c a The George Washington University School of Business, Department of Marketing, Funger Hall, Suite 301, Washington, DC 20052, United States b Quinnipiac University School of Business, 275 Mount Carmel Avenue, Hamden, CT 06518, United States c The George Washington University School of Business, Department of Management, Duquès Hall, Office 315D, Washington, DC 20052, United States abstract article info Article history: Received 20 October 2011 Accepted 26 January 2012 Available online xxxx Keywords: Technical assistance Small business performance Primary and secondary business functions Quantile regression This study investigates the relationship between outside managerial assistance and small business perfor- mance using a conditional quantile regression approach. The model was tested using a sample of 902 ven- tures that received managerial or technical assistance from the U.S. Small Business Administration's Entrepreneurial Development Resource Partners. Results show that outside assistance for primary business functions, such as marketing strategy, promotional strategy, financial management and general management, is more effective for firms with lower levels of financial performance. Outside assistance for secondary busi- ness functions, such as human resources and obtaining capital, is likely to have a greater impact on firms in the middle- to upper-quantile levels. Based on the results, we propose that managerial outside assistance providers should employ different approaches for firms with lower versus higher levels of financial performance. © 2012 Elsevier Inc. All rights reserved. 1. Introduction According to prior studies in entrepreneurship, public-sector entre- preneurial assistance programs have had positive influence on new venture creation by improving the capabilities of their founders (Gatewood, 1993). In addition, these programs may positively affect a venture's success by leading to revenue and employment growth that exceeds national averages. However, because these public-sector man- agement and technical assistance programs are expensive and rely upon public funds, evaluation of these programs remains a consistent focus of scholars and policymakers. U.S. government oversight agencies such as the Office of Management and Budget are required to provide analysis and policy recommendations pertaining to programmatic funding. Both advocates and critics of entrepreneurship programs, in- cluding researchers, policymakers, and the U.S. Small Business Adminis- tration (SBA), are interested in determining whether outside assistance has a significant economic impact. Although the outcomes of these pro- grams have been a subject of debate (e.g. Wood, 1994), researchers have argued that outside assistance programs for less-experienced entrepreneurs lead to the creation and development of sustainable competitive advantage (Chrisman & McMullan, 2004; Chrisman, McMullan, & Hall, 2005). Thus, previous studies have acknowledged the value of and need for managerial outside assistance. In general, these studies have found that entrepreneurial assistance programs improve the abilities and problem-solving skills of individuals pursuing the venture-creation pro- cess (Lang & Golden, 1989). Outside assistance programs are shown to not only help entrepreneurs develop knowledge for their nascent ven- tures, but also assist them once they begin and are fully functioning (Chrisman, Hoy, & Robinson, 1987). Effective management and techni- cal assistance (face-to-face counseling) have been shown to help small businesses overcome their weaknesses and to implement appropriate managerial functions (Chrisman et al., 2005; West & Noel, 2009). Al- though a number of articles have attempted to account for the helpful- ness of assistance programs as a knowledge resource, such studies tend to focus on generalities rather than the specific needs of individual firms. Recognizing the specific needs of individual firms is important for a simple reason—they are fundamentally different from one another in a number of areas such as entrepreneurial skills, experiences, history, values, strategies, and industry structures (Chrisman, Bauerschmidt, & Hofer, 1998). In other words, all ventures are heterogeneous and the re- source needs of each venture are idiosyncratic (Alvarez & Busenitz, 2001; Lichtenstein & Brush, 2001; West & Noel, 2009), and all ventures have individual specific resources to lead to the heterogeneous outputs (Alvarez & Busenitz, 2001). Thus, this study focuses on specific outside assistance programs seen as a knowledge resource. The current study builds on existing research by examining the ef- fects of outsider assistance on small businesses at different levels of performance. We propose that the different levels of firm performance are a function of managerial assistance, along with key firm and owner characteristics. This paper begins with a brief review of the managerial Journal of Business Research xxx (2012) xxx–xxx ⁎ Corresponding author. Tel.: +1 217 766 1693; fax: +1 202 994 8999. E-mail addresses: joohwans@gwu.edu (J.H. Seo), vperry@gwu.edu (V.G. Perry), David.Tomczyk@quinnipiac.edu (D. Tomczyk), gsolomon@gwu.edu (G.T. Solomon). JBR-07583; No of Pages 8 0148-2963/$ – see front matter © 2012 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2012.07.003 Contents lists available at SciVerse ScienceDirect Journal of Business Research Please cite this article as: Seo, J.H., et al., Who benefits most? The effects of managerial assistance on high- versus low-performing small businesses, Journal of Business Research (2012), doi:10.1016/j.jbusres.2012.07.003