European funds and firm performance: Evidence from a natural experiment

Research output: Working paper


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.
Original languageEnglish
Place of PublicationEssen
PublisherRWI – Leibniz-Institut für Wirtschaftsforschung
Number of pages34
Publication statusPublished - Aug 2022

Publication series

Name Ruhr Economic Papers
PublisherRWI – Leibniz-Institut für Wirtschaftsforschung
ISSN (Electronic)1864-4872


  • Grants
  • Regional policy
  • Private firm
  • Municipalities
  • Portugal


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