%0 Report
        %A Mesquita, José
%A Santos, João Pereira dos
%A Tavares, José
        %T European Funds and Firm Performance: Evidence from a Natural Experiment
        %D 2023
        %8 2023 Oct
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 16526
        %U https://www.iza.org/publications/dp16526
        %X This paper analyses the impact of European Union (EU) funds on the performance of private firms. In particular, we examine a quasi-natural experiment consisting of a redrawing of administrative areas that expanded regional eligibility and led to a sudden increase in accessibility to EU grants for firms located in 33 Portuguese municipalities. Using a comprehensive linked employer-employee administrative dataset that covers the universe of private firms between 2003 and 2010, our difference-in-differences estimates uncover a significant and positive causal effect of increased eligibility on firms' sales, labour productivity, and average wages, while employment is not significantly altered. While firms' sales in the non-tradable sectors are positively impacted, firms' sales in more competitive, tradable, sectors remain unaffected by increased access to EU funds.
        %K municipalities
%K private firm
%K regional policy
%K grants
%K Portugal