| The Department of Defense (DOD) Small Business Innovation Research (SBIR) program exists primarily to enhance the commercial viability of defense contracts. However, the overall effectiveness of this important program is generally unknown and has received little attention from empirical researchers. Consequently, this study seeks to fill this void through two key contributions. Its first objective is to provide an enhanced evaluation methodology taking advantage of the general availability of current data. Within this general context there are two related research questions: (1) does SBIR positively influence commercial viability? and (2) what is the most effective means of evaluating this important question? The second objective is to provide an estimate of a treatment effect from winning a SBIR contract.;I argue that the empirical methods used in this paper represent an improved---e.g., more efficient, less biased---means of evaluating the general effectiveness of the DOD SBIR program. In particular, I examine its ability to enhance the likelihood that a participant will be awarded more total non-SBIR defense contract dollars after winning a SBIR contract. Arguably, the methods presented in this paper represent an important step in effectively evaluating the SBIR program and its ability to achieve critical objectives. Previous studies in this regard have proven generally inconclusive.1 This study introduces a new and effective means of evaluating the program, through which it finds that the SBIR program effectively increases defense contract opportunities for program participants. As a result of the new learning and insights produced by this study, the benefits available to participants through the SBIR program arguably may be increased, while it becomes easier to justify continued DOD investment.;Key words: Small Business; doubly robust estimation, selection bias, department of defense;1 For instance, see GAO (2005) and OMB (2005). |
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