TY  - RPRT
        AU  - Mesquita, José
AU  - Santos, João Pereira dos
AU  - Tavares, José
        TI  - European Funds and Firm Performance: Evidence from a Natural Experiment
        PY  - 2023/Oct/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16526
        UR  - https://www.iza.org/publications/dp16526
        AB  - 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.
        KW  - municipalities
KW  - private firm
KW  - regional policy
KW  - grants
KW  - Portugal
        ER  -