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Is the EIB distorting competiton? Evidence from Portugal
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Orientador(es)
Resumo(s)
The European Investment Bank finances projects of medium and large sized firms through ”project loans”. Because they involve favorable conditions such as low interest rates and a long repayment period, there is a question of whether the EIB could be distorting market competition and reinforcing eventual dominant positions.
This paper aims to empirically test this hypothesis. Using data from Portuguese firms between 2007 and 2015, we use an empirically robust estimator to assess the impact of project loans on firms’ market shares, which proxies market power. As a byproduct of this research, we also investigate the impact on firms’ investment rate. We find no evidence that assisted firms experience abnormal increases in their market shares in the years that follow the attribution of the loans. Thus, we fail to reject the hypothesis that project loans do not distort market competition.
Descrição
A Work Project, presented as part of the requirements for the Award of a Masters Degree in Economics from the NOVA – School of Business and Economics
Palavras-chave
European investment bank Competition Impact evaluation