European Funds and Firm Performance: Evidence from a Natural Experiment

Mesquita Gabriel, José, João Pereira Dos Santos and Tavares, José

No 17362, CEPR Discussion Papers from Centre for Economic Policy Research

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 an administrative redistricting 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 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: Quasi-natural experiment; European funds; Firm performance; Municipalities (search for similar items in EconPapers)
JEL-codes: C21 R10 (search for similar items in EconPapers)
Date: 2022-06
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