Public Programs, Innovation, and Firm Performance in Chile
Alvarez, Roberto; Crespi, Gustavo; Cuevas, Conrado
This paper evaluates the impact of two public programs, FONTEC and FONDEF, aimed at fostering innovation in Chilean firms. With the cooperation of several public agencies, participants and non-participants in these programs during the period 1995-2000 were identified from a large panel of firms in the manufacturing sector. From this information, the effect of the programs could be determined using propensity score matching (PSM) and differences in differences (DID) in a multiple treatment setting. Results show that these programs have generally been associated with increases in employment and productivity, but the impact is heterogeneous across programs and indicators of firm performance.