Mesquita, JoséPereira dos Santos, JoãoTavares, José2025-06-092025-06-092025-120921-898XPURE: 118234139PURE UUID: c519eb02-520d-4267-a701-721a6fd33d70Scopus: 105007067870WOS: 001500343800001http://hdl.handle.net/10362/184064Funding Information: This work was funded by Fundação para a Ciência e Tecnologia (UIDB/00124/2020, UIDP/00124/2020 and Social Sciences DataLab -PINFRA/22209/2016), POR Lisboa and POR Norte (Social Sciences DataLab, PINFRA/22209/2016). Jo\u00E3o Pereira dos Santos gratefully acknowledges financial support by UK Research and Innovation (UKRI) under the UK government\u2019s Horizon Europe funding guarantee [grant number EP/Y016718/1]. All errors are our own. Publisher Copyright: © The Author(s) 2025.This paper examines the impact of European Union (EU) funds on the performance of private firms. We exploit a quasi-natural experiment arising from an administrative redrawing of geographical boundaries, which led to a discrete change in regional eligibility? This led to a sudden and substantial increase in access to EU grants directed at firms located in 33 Portuguese municipalities. Using a comprehensive linked employer-employee administrative dataset which covers the universe of private firms between 2003 and 2010, our difference-in-differences estimates uncover a significant and positive causal effect of increased eligibility on firms’ sales, labor productivity, and average wages, while employment is not significantly altered. Although firms’ sales in the non-tradable sectors are positively impacted, firms’ sales in more competitive, tradable, sectors remain unaffected by increased access to EU funds.20893229engGrantsMunicipalitiesPortugalPrivate firmRegional policyGeneral Business,Management and AccountingEconomics and Econometricsjournal article10.1007/s11187-025-01052-zhttps://www.scopus.com/pages/publications/105007067870