Enhancement of innovations through the public programmes: Does it work?

The current policy orientation towards competitiveness requires application of innovative approaches. The public programmes intended to support innovations in companies and thus increase competitiveness and employment. From this perspective, our research aims at answering a research question whether the assistance of the European Regional and Development Fund in firms has impact on employment, sales and profit of supported firms. The study is based on conducting a counterfactual impact evaluation of the Operational programme Enterprises and Innovations (OPEI) in the Czech Republic which took place during the period of 2007-2013. We have analysed a data sample of 31,604 firms, of which 1,173 were applicants for the ERDF assistance. The data sample enabled us to test the impact of the ERDF assistance among the successful applicants (n= 583) and compare them to i) non-applicants (n=30,431); and ii) to the rejected applicants (n=590). The method we used was a propensity score matching (PSM). We have investigated the whole sample and also on samples divided into three groups according to the size of applicants (firms up to 50 employees, 50 - 250 employees and larger firms). We have found statistically significant estimates of the positive impact of the ERDF on employment, sales and profit.