Volume 5, Issue 1, March 2020, Page: 1-11
Impact of European Funds on Value Creation of Portuguese Companies
Nuno Teixeira, Department of Accounting and Finance, Business School of Polytechnic Institute of Setúbal, Setúbal, Portugal
Luís Vitorino, Department of Accounting and Finance, Business School of Polytechnic Institute of Setúbal, Setúbal, Portugal
Rui Brites, Department of Management, Business School of Polytechnic Institute of Setúbal, Setúbal, Portugal
Teresa Godinho, Department of Accounting and Finance, Business School of Polytechnic Institute of Setúbal, Setúbal, Portugal
Received: Dec. 24, 2019;       Accepted: Dec. 31, 2019;       Published: Mar. 10, 2020
DOI: 10.11648/j.ijafrm.20200501.11      View  39      Downloads  36
Abstract
This work aims to highlight the impact of Community funds on the capacity to create financial value of Portuguese companies. We develop a theoretical framework with a reflection on various topics relevant to research, namely the importance of investments for companies, the concepts of financial performance and the logic of value creation, the metrics for value creation and the cost of capital. In addition, we have looked at several studies with similar research objectives to observe the methodologies used and the research results achieved. The study we developed looked at the 166 companies that benefited from EU funds in 2014 under the Sistema de Incentivos à Inovação, which is a part of the EU Incentives System for Research and Technological Development. To measure value creation capacity, we used EVA, since it is an indicator which allows you to easily measure the value created in each period and can be obtained directly from the financial statements of companies. The research results showed that the companies studied presented a greater capacity to create value, create employment and internationalize the activity in the financial year 2016 (although only job creation and internationalisation have shown statistically relevant differences). However, the statistical tests performed did not show any relationship among companies' best performance in the three indicators and the subsidies received, which means that, eventually, such positive developments have occurred due to other factors, such as the very favorable evolution of the Portuguese economy.
Keywords
Financial Performance, Value Creation, Investments, Subsidies, EU Funds
To cite this article
Nuno Teixeira, Luís Vitorino, Rui Brites, Teresa Godinho, Impact of European Funds on Value Creation of Portuguese Companies, International Journal of Accounting, Finance and Risk Management. Special Issue: Perspectives on Risk Management and Impact on Sustainability of Companies. Vol. 5, No. 1, 2020, pp. 1-11. doi: 10.11648/j.ijafrm.20200501.11
Copyright
Copyright © 2020 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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