Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282653 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16526
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
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.
Subjects: 
grants
regional policy
private firm
municipalities
Portugal
JEL: 
C21
R10
Document Type: 
Working Paper

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