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European structural funds and the performance of Portuguese firms

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This article provides new evidence on the impact of receiving European structural funds on Portuguese firms. It explores a novel dataset, covering the universe of projects submitted to the COMPETE programme under the 2007-2013 framework, combined with rich longitudinal firm-level data for 2006-2019. This long time span allows contrasting firms that were granted financial support with comparable firms that also applied but were unsuccessful, for several years both before and after the bid. By employing a dynamic difference-in-differences setup focused on various firms’ performance indicators, we identify positive and persistent effects in firms receiving financial support. Though to varying degrees, firms with backed projects have higher employment, turnover, gross value added, productivity, capital, and exports. These differences vis-à-vis unsupported firms prevail for several years.
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