Assessing the effectiveness of the Eureka Program

The aim of this paper is to test whether participation in a European public initiative to support market-oriented R&D such as the Eureka Program has a positive impact on the performance of participating firms and if so how long it is before the impact becomes apparent These Issues are explored using a dynamic panel data model covering the period 1994-2003 for a sample of 866 European firms 284 of which completed a Eureka project during the period of analysis The results show how the completion of a Eureka project has a positive influence over firm performance measured as return over assets (ROA) although the effect does not manifest itself until a year after project completion Nevertheless when the sample is divided by sector it is obtained that while manufacturing firms follow the general pattern of a positive effect appearing a year after project completion the effect in non-manufacturing firms is already apparent during the year of completion (C) 2010 Elsevier B V All rights reserved