Discussion paper

DP17362 European Funds and Firm Performance: Evidence from a Natural Experiment

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.

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Citation

Mesquita Gabriel, J, J dos Santos and J Tavares (2022), ‘DP17362 European Funds and Firm Performance: Evidence from a Natural Experiment‘, CEPR Discussion Paper No. 17362. CEPR Press, Paris & London. https://cepr.org/publications/dp17362