European funds and firm performance: Evidence from a natural experiment

José Mesquita Gabriel, João Pereira dos Santos and José Tavares

No 966, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Expanding regional eligibility in the access to grants can have important consequences for the performance of firms. We examine a quasi-natural experiment that consisted of a redrawing of administrative areas intended to increase accessibility to European Union (EU) funds using a rich administrative dataset that covers the universe of Portuguese private firms between 2003 and 2010. Our results uncover a positive causal impact of increased eligibility on firms' sales. In contrast, employment and labour productivity do not seem to be significantly impacted by the reform. The effects are heterogeneous: while sales of firms in the services and non-tradable sectors are positively impacted, sales of firms in more competitive sectors are not affected.

Keywords: Grants; regional policy; private firm; municipalities; Portugal (search for similar items in EconPapers)
JEL-codes: C21 R10 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur, nep-geo and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:966

DOI: 10.4419/96973130

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