Working Paper: CEPR ID: DP17362
Authors: Jos Mesquita; Gabriel João Pereira dos Santos; Jos Tavares
Abstract: Expanding regional eligibility in the access to grants can have important consequences forthe performance of firms. We examine a quasi-natural experiment that consisted of anadministrative redistricting intended to increase accessibility to European Union (EU) fundsusing a rich administrative dataset that covers the universe of Portuguese private firmsbetween 2003 and 2010. Our results uncover a positive causal impact of increased eligibilityon firms’ sales. In contrast, employment and labour productivity do not seem significantlyimpacted by the reform. The effects are heterogeneous: while sales of firms in the servicesand non-tradable sectors are positively impacted, sales of firms in more competitive sectorsare not affected.
Keywords: quasi-natural experiment; european funds; firm performance; municipalities
JEL Codes: C21; R10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased eligibility for EU funds (O52) | Firm sales (L21) |
| Increased eligibility for EU funds (O52) | Employment (J68) |
| Increased eligibility for EU funds (O52) | Labor productivity (O49) |
| Increased eligibility for EU funds (O52) | Average wages (J31) |
| Increased eligibility for EU funds (O52) | Total number of firms (L20) |
| Increased eligibility for EU funds (O52) | Firm dynamics (entry or exit rates) (L26) |