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Effects of grants from EU funds on business performance of non-financial corporations in Croatia

Author

Listed:
  • Domagoj Selebaj

    (Croatian National Bank, Zagreb, Croatia)

  • Matej Bule

    (Croatian National Bank, Zagreb, Croatia)

Abstract

This paper quantifies the impact of grants from EU funds on non-financial corporations performance in Croatia. For the purposes of the research, three different data sources were used, which were merged into a single enterprise level database. Enterprises for the control group were selected using propensity score matching method, while the quantifications of effects in the years after receiving the support were estimated using difference in differences method. Also, the doseresponse relationship between the relative size of the received grant and the level of impact on performance indicators was assessed. The research showed that the use of EU funds has a strong and positive effect on the observed indicators, such as employment, operating income, labour productivity or total factor productivity and capital intensity. At the same time, the level of impact significantly depends on the relative size of grant received from EU funds.

Suggested Citation

  • Domagoj Selebaj & Matej Bule, 2021. "Effects of grants from EU funds on business performance of non-financial corporations in Croatia," Public Sector Economics, Institute of Public Finance, vol. 45(2), pages 177-207.
    • Handle: RePEc:ipf:psejou:v:45:y:2021:i:2:p:177-207
    DOI: 10.3326/pse.45.2.1
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    2. Sónia Cabral & Maria Manuel Campos, 2023. "European structural funds and the performance of Portuguese firms," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    3. Nigohosyan, Daniel & Vassileva, Iglika & Vutsova, Albena, 2025. "The effects of EU grants on SMEs: Evidence from Bulgaria," Economic Systems, Elsevier, vol. 49(1).

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    More about this item

    Keywords

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    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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