On the impact of subsidies on financial performance: lessons from the Portuguese regional football associations - an roe approach

Abstract

To promote football, the Portuguese Football Federation (FPF) allocates funds to the country’s regional football associations (RFAs).Based on a multi-theoretical framework, this thesis applied a fixed effect model on financial data to examine the effect of FPF funding on the RFAs’ financial performance, measured through ROA and ROE. Subsides should have a positive impact on all RFAs. However, results suggest that only RFAs with certain financial vulnerabilities benefit from funding, whereas their robust counterparts are harmed by it. Conclusions warrant special attention from the FPF, who should understand that changes are necessary to improve the impact of subsidies across all RFAs.