The ATP Halo Effect
In order to determine if the ATP award has the hypothesized halo effect and how much it might be worth in additional funds, we took into account other factors related to winning an ATP award that may also influence other investors.
These include the firm's prior success in raising funds, the size of the firm, and the maximum rating by the ATP reviewers. The reviewers' ratings serve as a measure of the technical quality and promise of a project and of the business and economic potential of the technology. We are interested in determining the influence of the ATP award as a pure signal to the investment community, and our statistical analyses confirm our hypothesis. After we have controlled for these other factors, we still find a significant halo effect from an ATP award.
Award winners who seek additional funding from non-ATP sources were more successful than non-winners and received a larger amount of funding.
Our analysis concludes that winning an ATP award significantly increases the firm's success in attracting additional funds from other sources for R&D activities. Our findings provide strong evidence that the ATP award confers a halo effect on winners that makes them more likely to attract other funding when compared to non-winners of the same size, and age with project of similar business and technical quality. Thus, our results confirm that the ATP award appears to send a market signal that certifies that the firm and the technology are promising.