programs of the ME and Bancomext had negative effects on several outcome variables. The only group to show positive effects was Other Agency.

Using the fixed-effects model presented in equation (8), we find that participation in any SME program has positive and significant effects of 6 percent on value added, 5 percent on gross production, 5 percent in total sales, 6 percent on employment, 6 percent on fixed assets. The average treatment effect of participation in programs by ME, CONACyT and Other Agency is now positive and statistically significant at the 1, 5, or 10 percent level for most outcomes (lower part of Table A1). The impact of ME programs ranges between 4 and 6 percent, CONACyT between 7 and 26 percent and Other Agency between 3 and 14 percent. One can thus infer that programs under these agencies had on average a positive impact on the performance of SMEs. The only exception was the STPS program, which had a negative impact on some outcome variables, with the exception of the CIMO program up to 2001 which exhibit a statistical significant positive effect of nearly 27 percent on fixed assets and technology transfer payments (Table A6).

The results by program, for those with enough sample size captured in the ENESTYC 2005, indicate that in some programs, such as ME’s PROSEC and CONACyT’s Fiscal Support and Technology Innovation, the average effects were not significant in levels (equation 7). However, once corrected by time invariant biases, the effects turned to positive in differences (equation 8), suggesting positive impacts from these interventions (Table A2). The estimates for PNAA were positive in levels and positive in differences, suggesting that firms participating in PNAA performed better than comparable firms, even once we control for time invariant bias due to unobservable characteristics. The estimated effect of PNAA is 6 percent increase in value-added, with similar results for the rest of the outcome variables. The estimates for PROSEC and Fiscal Support and Technology Innovation were not significant in levels and were positive and statistically significant in differences. The estimated impact of these programs ranges from 6 to 16 percent in outcome variables.

The results for CIMO changed from not significant in levels to negative in differences. These results suggest that CIMO did not have an impact on the performance of firms. Firms that participated in CIMO up to 2001 showed a positive impact on selected outcome variables such as foreign sales, fixed assets and technology transfers (Table A6). These results are in line with the earlier impact evaluation from Tan and Lopez-Acevedo (2005), which found positive impacts on intermediate outputs but no significant impacts on outcomes before 2001.

A number of factors could explain why positive impacts were found for PNAA, PROSEC and CONACyT’s fiscal incentives program:

- On average, each firm benefited by CONACyT programs between 2001 and 2006 received US$264,000, while the average amount that the federal government invested per firm in all of its programs was about US$22,000–12 times less. The amount of resources per firm of CONACyT’s programs was second only to Bancomext.

- Another possible explanation for CONACyT’s programs is their support for innovation. Research indicates that the benefited firms had previously started doing research and

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