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Public Support to Firm-Level Innovation: An Evaluation of the FONTEC Program

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  • José Miguel Benavente

    ()
    (INTELIS, Department of Economics, University of Chile)

  • Gustavo Crespi

    ()
    (International Development Research Centre)

  • Alessandro Maffioli

    ()
    (Inter-American Development Bank)

Abstract

In this paper, we analyzed the effectiveness of a Chilean TDF, the FONTEC program. We found that FONTEC’s subsides partially crowded-out private investments in innovation and they more effectively promoted technological upgrades and process innovations, rather than radical product innovations. In the empirical analysis, we considered four levels of potential impact: input additionality, behavioral additionality, innovative output, and performances. In terms of input additionality, although FONTEC increased the overall R&D budget of the firms, it did not stimulate additional private investment in innovation activities. In terms of behavioral additionality, FONTEC effectively promoted process innovation and induced changes in the innovation strategy of the firms. In terms of innovative outputs, FONTEC did not significantly foster patenting activities and had no significant impact on the creation and adoption of new products. In terms of performances, although FONTEC increased the sales, employment and export, it did not significantly foster productivity. In the absence of randomized experiments, we estimated these impacts through a quasi-experimental approach that combines difference-in-difference and propensity score matching techniques.

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Bibliographic Info

Paper provided by Inter-American Development Bank, Office of Evaluation and Oversight (OVE) in its series OVE Working Papers with number 0507.

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Length: 28 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:idb:ovewps:0507

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Keywords: FONTEC; Chile; Research and Development; Matching Grants; Policy Evaluation.;

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Citations

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Cited by:
  1. Gladys Lopez-Acevedo & Hong W. Tan, 2011. "Impact Evaluation of Small and Medium Enterprise Programs in Latin America and the Caribbean," World Bank Publications, The World Bank, number 2298, July.
  2. Andrés Zahler & Claudio Bravo & Daniel Goya & José Miguel Benavente, 2014. "Public-Private Collaboration on Productive Development in Chile," IDB Publications 85078, Inter-American Development Bank.
  3. Gustavo A. Crespi & Alessandro Maffioli & Pierre Mohnen & Gonzalo Vázquez, 2011. "Evaluating the Impact of Science, Technology and Innovation Programs: a Methodological Toolkit," SPD Working Papers 1104, Inter-American Development Bank, Office of Strategic Planning and Development Effectiveness (SPD).
  4. Fernandes, Ana M. & Paunov, Caroline, 2009. "Does tougher import competition foster product quality upgrading ?," Policy Research Working Paper Series 4894, The World Bank.
  5. Victoria Castillo & Alessandro Maffioli & Sofía Rojo & Rodolfo Stucchi, 2014. "The effect of innovation policy on SMEs’ employment and wages in Argentina," Small Business Economics, Springer, vol. 42(2), pages 387-406, February.
  6. Veronica González & Pablo Ibarrarán & Alessandro Maffioli & Sandra Rozo, 2009. "The Impact of Technology Adoption on Agricultural Productivity: The Case of the Dominican Republic," OVE Working Papers 0509, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
  7. Dezhina, I. & Simachev, Yu., 2013. "Matching Grants for Stimulating Partnerships between Companies and Universities in Innovation Area: Initial Effects in Russia," Journal of the New Economic Association, New Economic Association, vol. 19(3), pages 99-122.
  8. Jose Miguel Benavente & Daniel Goya, 2012. "The Economics of IP in the context of a Middle Income Country," Working Papers wp350, University of Chile, Department of Economics.
  9. Francisca Henriquez, 2009. "Microcrédito y su Impacto: Un Acercamiento con Datos Chilenos," OVE Working Papers 0309, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).

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