to 1995. The treatment group was administered a beneficiary survey covering the period between 1992 – the pre-treatment year – and 1995 which marked the end of their participation. The study yielded two principal results. First, participation in PROFOs was associated with improvements in administration, planning and marketing, increased managerial and worker training, and greater access to other public institutions for extension services, consultants, and funds for technology and technical assistance such as FONTEC and FAT; however, only small gains were achieved in introduction of new products or productive processes. Second, participation was associated with gains in total factor productivity (TFP) growth measured by the residual from a Cobb-Douglas production function model. The treatment group experienced higher TFP growth as compared to the control group, ranging between 11 and 14 percent depending upon model specifications with and without propensity score matching.

Benavente, Crespi and Maffioli (2007) investigated the impacts of participation in FONTEC programs on firms’ R&D expenditures, innovation strategies, technological outputs and economic performance. The data comprised 219 firms that had benefited from FONTEC and a control group provided by the Tax Authorities of 220 nonparticipating firms with similar geographical and sector distributions as the treatment group. Both groups were administered a survey questionnaire on experiences with the program and on key qualitative and quantitative outcomes covering the period from 1998 to 2002. Differences between the two groups necessitated a re-matching of the samples using PSM, revealing that younger firms and firms in the more advanced manufacturing sectors were more likely to have participated in the FONTEC program. Using DID methods combined with PSM, they found that participation in FONTEC led to some crowding out of own R&D resources, increased interactions with external sources of knowledge and financing, improved process innovations but not new product development. Although they found positive impacts on employment, sales and exports, there were no significant gains in productivity growth leading the authors to suggest that “R&D activities may take some time to have an impact ... and therefore more time may be needed to obtain conclusive results in terms of productivity.” The principal findings and limitations of previous impact evaluations of SME programs in Chile may be summarized as follows. First, they found evidence that program participation was associated with improvements in intermediate or short-term outcomes but with mixed results on final outcomes which may take time to be realized, suggesting that longer panels are needed to measure program impacts on firm performance. Second, all three studies found increased interactions with, and use of support services from, other public institutions. While this was seen as a positive program outcome, it raises questions about attribution of gains in firm performance between the program being evaluated and other support services used. Finally, the selection of control groups in all three studies may have included some firms that had participated in other programs than the one being evaluated. If so, they potentially bias the counterfactual, and thus the impacts of program participation estimated for the treatment group. Some of these findings and issues are revisited in the following section.

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