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Evaluating SME support Programs in Chile using panel firm data

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  • Hong Tan

Abstract

This paper evaluates small and medium enterprise (SME) support programs in Chile using a firm-level panel for the 1992-2006 period on two groups of firms – a treatment group that participated in SME programs and a control group that did not. These unique panel data provide an unprecedented opportunity to address several issues that have plagued impact evaluations of SME programs – selectivity bias from observed and unobserved firm heterogeneity, identification of an appropriate control group, and inability to track firms over a long enough period of time for performance outcomes to be realized. Using difference-in-differences models combined with propensity score matching methods, the paper finds evidence that participation in SME programs in Chile is associated with improvements in intermediate outcomes (training, adoption of new technology and organizational practices), and causally with positive and statistically significant impacts on sales, production, labor productivity, wages and exports. The mixed results of previous studies may be attributable in part to the confounding effects of unobserved heterogeneity motivating selection into programs of firms with relatively low productivity levels, and in part to time-effects of program participation occurring in years after the time horizon of most impact evaluation studies.

Suggested Citation

  • Hong Tan, 2009. "Evaluating SME support Programs in Chile using panel firm data," Policy Research Working Paper Series 5082, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5082
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    File URL: http://documents.worldbank.org/curated/en/608671468022468693/pdf/WPS5082.pdf
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    Citations

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    Cited by:

    1. Sasan Bakhtiari & Robert Breunig & Lisa Magnani & Jacquelyn Zhang, 2020. "Financial Constraints and Small and Medium Enterprises: A Review," The Economic Record, The Economic Society of Australia, vol. 96(315), pages 506-523, December.
    2. Mattoo, Aaditya & Cadot, Olivier & Gourdon, Julien & Fernandes, Ana Margarida, 2011. "Impact Evaluation of Trade Interventions: Paving the Way," CEPR Discussion Papers 8638, C.E.P.R. Discussion Papers.
    3. Mollah, Sabur & Skully, Michael & Liljeblom, Eva, 2021. "Strong Boards and Risk-taking in Islamic Banks," Review of Corporate Finance, now publishers, vol. 1(1-2), pages 135-180, April.
    4. Consuelo García de la Torre & Luis Portales & Gustavo A. Yepes López, 2021. "Sostenibilidad en las pymes de América Latina y el Caribe," Books, Universidad Externado de Colombia, Facultad de Derecho, number 1306, October.
    5. Hossein Askari & Abbas Mirakhor, 2014. "Risk sharing, public policy and the contribution of Islamic finance," PSL Quarterly Review, Economia civile, vol. 67(271), pages 345-379.
    6. Grimm, Michael & Paffhausen, Anna Luisa, 2015. "Do interventions targeted at micro-entrepreneurs and small and medium-sized firms create jobs? A systematic review of the evidence for low and middle income countries," Labour Economics, Elsevier, vol. 32(C), pages 67-85.
    7. David Alfaro‐Serrano & Tanay Balantrapu & Ritam Chaurey & Ana Goicoechea & Eric Verhoogen, 2021. "Interventions to promote technology adoption in firms: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(4), December.
    8. Lauro Gonzalez & Caio Piza & Tulio Cravo & Samer Abdelnour & Linnet Taylor, 2014. "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," Campbell Systematic Reviews, John Wiley & Sons, vol. 10(1), pages 1-46.

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