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Impact evaluation of an SME program

Impact evaluation of an SME program. Attila Béres National Development Agency Hungary. Program characteristics. Grants to SMEs for modernization Purchase of equipments Maximum grant 25 M Ft (~100 000 €) Private contribution min. 50% ~9000 applicants ~3500 beneficiaries

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Impact evaluation of an SME program

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  1. Impact evaluation of an SME program Attila Béres National Development Agency Hungary

  2. Program characteristics • Grants to SMEs for modernization • Purchase of equipments • Maximum grant 25 M Ft (~100 000 €) • Private contribution min. 50% • ~9000 applicants • ~3500 beneficiaries • Assistance approved 42 Bn Ft (~170 Mn €)

  3. Questions • Did assisted SMEs invest more? • Differences in the growth of tangible assets between the treated and the control groups • Did assisted SMEs grow faster? • Differences in the growth of net sales between the treated and the control groups

  4. Groups of interest • Did not apply for grants • Control group: 62 963 SMEs • Applied but did not win • „Treated” group: 1 134 SMEs • Applied for grants and won • Treated group: 981 SMEs In total approx. 8% of Hungarian SMEs

  5. Group characteristics

  6. Methodologies • Simple regression • have to control for all important variables • Difference-in-differences (DiD) • unobservable factors are time invariant • Propensity Score Matching (PSM) • controls for time-varying unobservables

  7. Intuition behind PSM

  8. Results of matching - 2004

  9. Results of matching - 2005

  10. Results of matching - 2006

  11. Summary • Assisted SMEs were bigger and grew faster even before the program • Significant effects on investments even in the short run • No significant effects on growth (at least not in the short run) • Significant effects on investment even for those SMEs, which applied for but did not win

  12. Number of SMEs with matching

  13. Numeric results (without PSM)

  14. Numeric results (with PSM)

  15. Limitations • This method is applicable only for measuring the effects on the assisted SMEs • Can not catch multiplicator or nation-wide impacts • To catch those impacts one need macroeconomic models

  16. Impact evaluation sources • OECD Framework for the Evaluation of SME and Entrepreneurship Policies and Programmes • NONIE • http://www.worldbank.org/ieg/nonie/index.html • American Evaluation Association • http://www.eval.org/ • Canadian Evaluation Society • http://www.evaluationcanada.ca/ • Institute for Fiscal Studies • http://www.ifs.org.uk/ • …

  17. Thank you for your attention! E-mail: attila.beres@nfu.gov.hu Web: www.nfu.gov.hu

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