NON-REPAYABLE SUBSIDIES AND FINANCIAL PERFORMANCE OF BENEFICIARY FIRMS: EVIDENCE FROM THE WESTERN DEVELOPMENT REGION OF ROMANIA, 2014–2023
NON-REPAYABLE SUBSIDIES AND FINANCIAL PERFORMANCE OF BENEFICIARY FIRMS: EVIDENCE FROM THE WESTERN DEVELOPMENT REGION OF ROMANIA, 2014–2023
Ioan SZUCS
West University of Timișoara, Faculty of Economics and Business Administration, Timișoara, Romania
ioan.szucs@e-uvt.ro
Abstract: This article examines the financial performance of firms that received nonrepayable subsidies under the 2014–2020 EU programming period in the Western Development Region of Romania, drawing on longitudinal data spanning 2014– 2023. Drawing on aggregated ORBIS data (Bureau van Dijk) — operating revenue, value added, net income, EBITDA, total assets, equity and employment — converted to RON at annual average BNR exchange rates, and contextualised against INS and Eurostat regional benchmarks, the study addresses three research questions: (i) how did the financial performance of subsidised firms evolve between 2014 and 2023? (ii) what is their relative contribution to the regional economy? (iii) what growth differential is observable between the beneficiary sub-population and the regional economy over the 2014–2023 period, and which among subsidy additionality, selection bias, or sectoral composition effects offers the most plausible descriptive account of that differential? Results show that aggregate turnover grew 4.8× (RON 493M → RON 2,370M) and value added 5.5× (RON 133M → RON 738M), consistently outpacing the 2.35× growth of regional GVA. Their share in regional GVA doubled from 0.24% to 0.57%. Net profitability remained stable at 8.8–12.7%. Labour productivity in subsidised firms, while growing substantially, remained at approximately 35–43% of the regional average throughout the decade, a pattern consistent with employment-intensive rather than high value-added growth, partly attributable to employment conditionalities embedded in applicant guides.
Keywords: non-repayable subsidies; cohesion policy; ERDF; firm performance; value added; Western Development Region; Romania; 2014–2023.
JEL Classification: G38; H81; R11; R58; L25; O18.
