good data on firm exit probabilities, we bound our estimates of program impacts by sensitivity analysis in which we re-estimate outcome models after dropping the bottom 5 percent of the treatment group in terms of outcome variables (e.g productivity, assuming that the lowest productivity firms would otherwise exit).

Several points emerge from comparing the treatment effects with trimming and the original fixed effect models (Tables A4 and A5). First, the significance and magnitude of the program impact is quite similar under the trimming and the original estimates. Second, there are isolated differences between both groups: for some programs or variables the estimates based on trimming data were slightly higher than the original estimates. For example, for ME programs, the outcome variables of employment, gross production, and total sales effects in the trimmed data barely increased compared to the original estimates. Second, for STPS programs, the treatment effects of some variables such as sales, gross production and value added in the original were negative and now are not significant. The key point to infer from this sensitivity analysis is that, in general, the direction and size of treatment effects are robust to controls for potential biases from firm exit.

# **7.- CONCLUSIONS**

The significant public resources invested by Mexico in recent years into programs supporting SMEs are not well evaluated. While promoting a more vibrant SME sector is a laudable goal, the relative success of current and past programs is difficult to ascertain with any rigor. This paper attempts to contribute to broadening and deepening efforts to evaluate SME program impacts, with the goal of improving the efficiency and effectiveness with which these resources are spent. It does so, first, by providing a detailed description of many of the main recent programs administered by various government agencies, and second, by designing and implementing a novel evaluation methodology to better assess outcome impacts over time.

Microenterprises and SMEs make up 99 percent of enterprises in Mexico, employ about 64 percent of the workforce, and account for over 40 percent of GDP. Given the importance of SME in the economy, governments in Mexico over the last 20 years have put in place a wide variety of SME support programs. An inventory identified 151 SME programs administered by different government agencies including CONACyT, Bancomext, and the ministries of economy, labor, finance, and environment, among others. While their stated objectives may differ, collectively these support programs seek to promote the productivity, quality, and competitiveness of small enterprises, encourage technology upgrading, training, and conservation, and improve earnings and safe working conditions for the workforce in SMEs.

As is apparent from the overview in Section 2, Mexico has a huge array of programs involved in supporting SMEs in some way. This in itself is an important finding, and suggests that Mexico would do well to design a more coherent framework to orient resources more efficiently and strategically, and avoid program overlap. As well, the lack of easily available information on program budgets, activities and beneficiaries points to a need for improved consolidation of information on SME support, to improve the ability of policymakers to make evaluations and comparisons, and ensure that the country’s scarce fiscal resources are achieving the greatest possible impact.

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