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

Author

Listed:
  • 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.

Suggested Citation

  • José Miguel Benavente & Gustavo Crespi & Alessandro Maffioli, 2007. "Public Support to Firm-Level Innovation: An Evaluation of the FONTEC Program," OVE Working Papers 0507, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
  • Handle: RePEc:idb:ovewps:0507
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    References listed on IDEAS

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    Cited by:

    1. Eduardo Fernández-Arias & Charles Sabel & Ernesto H. Stein & Alberto Trejos, 2016. "Two to Tango: Public-Private Collaboration for Productive Development Policies," IDB Publications (Books), Inter-American Development Bank, number 94716, February.
    2. repec:idb:idbbks:460 is not listed on IDEAS
    3. 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).
    4. 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.
    5. 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).
    6. repec:idb:idbbks:7705 is not listed on IDEAS
    7. 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, pages 387-406.
    8. Giuliani, Elisa & Maffioli, Alessandro & Pacheco, Manuel & Pietrobelli, Carlo & Stucchi, Rodolfo, 2014. "Evaluating the Impact of Cluster Development Programs," Papers in Innovation Studies 2014/10, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    9. 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).
    10. Eduardo Fernández-Arias & Charles Sabel & Ernesto H. Stein & Alberto Trejos, . "Two to Tango: Public-Private Collaboration for Productive Development Policies," IDB Publications (Books), Inter-American Development Bank, number 7694, January.
    11. 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.
    12. 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.
    13. José Miguel Benavente & Gustavo Crespi & Alessandro Maffioli, 2007. "The Impact of National Research Funds: An Evaluation of the Chilean FONDECYT," OVE Working Papers 0307, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    14. 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.
    15. Gabriel Casaburi & Gustavo Crespi & Ignacio L. De León & José Fernández & Lucas Figal Garone & Matteo Grazzi & Carlos Guaipatín & Jorge Katz & Juan J. Llisterri & Alessandro Maffioli & Juan Carlos Nav, 2016. "La política de innovación en América Latina y el Caribe: Nuevos caminos," IDB Publications (Books), Inter-American Development Bank, number 94816 edited by Juan Carlos Navarro & Jocelyn Olivari, February.
    16. repec:eee:wdevel:v:97:y:2017:i:c:p:330-348 is not listed on IDEAS
    17. Cardoza, Guillermo & Fornes, Gaston & Farber, Vanina & Gonzalez Duarte, Roberto & Ruiz Gutierrez, Jaime, 2016. "Barriers and public policies affecting the international expansion of Latin American SMEs: Evidence from Brazil, Colombia, and Peru," Journal of Business Research, Elsevier, vol. 69(6), pages 2030-2039.
    18. Andrés Zahler & Claudio Bravo Ortega & Daniel Goya & José Miguel Benavente, 2014. "Public-Private Collaboration on Productive Development in Chile," IDB Publications (Working Papers) 85078, Inter-American Development Bank.
    19. Tulio Cravo & Caio Piza, 2016. "The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in Low -and Middle- Income Countries: A Meta-Analysis," IDB Publications (Working Papers) 94938, Inter-American Development Bank.
    20. Fernandes, Ana M. & Paunov, Caroline, 2009. "Does tougher import competition foster product quality upgrading ?," Policy Research Working Paper Series 4894, The World Bank.
    21. Mario Sanginés & Joan Oriol Prats Cabrera & Carlos Pimenta & Gustavo García Osío & Juan Pablo Martínez Guzman & Mario Marcel & Pedro Farias & Gustavo Crespi & Martin D. Chrisney & Ana Corbacho, 2013. "The Fiscal Institutions of Tomorrow," IDB Publications (Books), Inter-American Development Bank, number 82298 edited by Ana Corbacho, February.

    More about this item

    Keywords

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

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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