Impact of European Funds on Value Creation of Portuguese Companies

Nuno Teixeira; Luís Vitorino; Rui Brites; Teresa Godinho

doi:doi:10.11648/j.ijafrm.20200501.11

| Peer-Reviewed

Impact of European Funds on Value Creation of Portuguese Companies

Nuno Teixeira, Luís Vitorino, Rui Brites, Teresa Godinho

Published in International Journal of Accounting, Finance and Risk Management (Volume 5, Issue 1)

Received: 24 December 2019 Accepted: 31 December 2019 Published: 10 March 2020

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

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.

Published in	International Journal of Accounting, Finance and Risk Management (Volume 5, Issue 1) This article belongs to the Special Issue Perspectives on Risk Management and Impact on Sustainability of Companies
DOI	10.11648/j.ijafrm.20200501.11
Page(s)	1-11
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Financial Performance, Value Creation, Investments, Subsidies, EU Funds

References

[1]	Neves, J. (2011). Avaliação e Gestão da Performance Estratégica da Empresa. (2ª Edição). Lisboa: Texto Editora.
[2]	Martins, A., Cruz, I., Augusto, M., Silva, P., & Gonçalves, P. (2009). Manual de Gestão Financeira Empresarial. Coimra: Coimbra Editora.
[3]	Teixeira, N. & Amaro, A. (2013). Avaliação do desempenho financeiro e da criação de valor. Revista Universo Contábil, 9 (4), 157-178.
[4]	Solnik, B. (1995). Gestão Financeira: conceitos e modelos essenciais. Publicações Europa America.
[5]	Pettinger, R. (2006). A decisão de investimento. Lisboa: Prefacio.
[6]	Araújo, A. J. (1999). Manual de Análise de Projetos de Investimentos. Lisboa: Rei dos Livros.
[7]	Marques, A. (2014). Conceção e Análise de Projetos de Investimento. 4º Edição. Lisboa: Edições Sílabo.
[8]	Soares, I., Moreira, J., Pinho, C., & Couto, J. (2015). Decisões de Investimentos - Análise Financeira de projetos. Lisboa: Edições Sílabo.
[9]	Beason, R & Weinstein, D E, (1996). Growth, economies of scale, and targeting in Japan (1955-1990). The Review of Economics and Statistics, 78 (2), 286-295.
[10]	Lee, J. W., (1996). Government interventions and productivity growth. Journal of Economic Growth, 1, 391-414.
[11]	Bergström, F. (2000). Capital subsidies and the performance of firms. Small Business Economics, 14 (3).
[12]	Roper, S. & Nola H. (2001). ‘Grant Assistance and Small Firm Development in Northern Ireland and the Republic of Ireland. Scottish Journal of Political Economy, 48, 99–117.
[13]	Tzelepis, D. & Skuras, D. (2006). Strategic performance measurement and the use of capital subsidies. International Journal of Productivity and Performance Management, 55 (7), 527-538.
[14]	Augusto Mateus & Associados & Price Waterhouse Coopers, (2013). Estudo de avaliação intercalar do programa operacional fatores de competitividade (COMPETE). Relatório Final”.
[15]	Cerqua, A. & Pellegrini, G. (2014). Do subsidies to private capital boost firms' growth? A multiple regression discontinuity design approach. Journal of Public Economics, 109, 114-126.
[16]	Carvalho, A. (2014). Subsídios ao investimento na rentabilidade das empresas-O caso do SI Inovação. Faculdade de Economia da Universidade do Porto. Tese de Mestrado não publicada.
[17]	Teixeira, N., Mata, C., Pardal, P., & Teixeira, A. (2012). A aplicação da rendibilidade supranormal para a avaliação da criação de valor;. XXIII Jornadas Hispano Lusas de Gestão Cientifica. Malaga-Espanha.
[18]	Neves, J. (2012). Análise e Relato Financeiro - Uma visão integrada de gestão. (5ª Edição) Lisboa: Texto Editores.
[19]	Silva, E., & Queirós, M. (2010). Gestão Financeira - Análise de Investimentos. Porto: Vida Economica.
[20]	Young, S., & O´Byrne, S. (2001). EVA® and Value Based Management. New York: MacGraw-Hill.
[21]	Teixeira, N. (2008). A rendibilidade e a criação de valor. XIII Encontro AECA, Aveiro.
[22]	Teixeira, N. (2013). A avaliação do risco e da criação de valor no contexto empresarial, in Empreendedorismo, Coesão Social e Dinâmicas Empresariais, Caderno da Sociedade e Trabalho nº 17, GEP/MSESS.
[23]	Esperança, J., Matias, F. (2009). Finanças Empresariais (2ª Edição). Alfragide: Texto Editora.
[24]	Jensen, Michael C. (1986). Agency costs of free cash flow, corporate finance and takeovers. American Economic Review, 76 (2), 323–329.
[25]	Damodaran, A. on-line. Available at 2019, em: http://pages.stern.nyu.edu/~adamodar/
[26]	Pinto, J., & Curto, J. (1999). Estatística para economia e gestão: instrumentos de apoio à tomada de decisão. Lisboa: Edições Sílabo.
[27]	Moutinho, L. & Hutcheson, G. (2008) Statistical Modelling for Management. London: SAGE.

Cite This Article

Plain Text BibTeX RIS

APA Style

Nuno Teixeira, Luís Vitorino, Rui Brites, Teresa Godinho. (2020). Impact of European Funds on Value Creation of Portuguese Companies. International Journal of Accounting, Finance and Risk Management, 5(1), 1-11. https://doi.org/10.11648/j.ijafrm.20200501.11

Copy | Download

ACS Style

Nuno Teixeira; Luís Vitorino; Rui Brites; Teresa Godinho. Impact of European Funds on Value Creation of Portuguese Companies. Int. J. Account. Finance Risk Manag. 2020, 5(1), 1-11. doi: 10.11648/j.ijafrm.20200501.11

Copy | Download

AMA Style

Nuno Teixeira, Luís Vitorino, Rui Brites, Teresa Godinho. Impact of European Funds on Value Creation of Portuguese Companies. Int J Account Finance Risk Manag. 2020;5(1):1-11. doi: 10.11648/j.ijafrm.20200501.11

Copy | Download

@article{10.11648/j.ijafrm.20200501.11,
  author = {Nuno Teixeira and Luís Vitorino and Rui Brites and Teresa Godinho},
  title = {Impact of European Funds on Value Creation of Portuguese Companies},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {5},
  number = {1},
  pages = {1-11},
  doi = {10.11648/j.ijafrm.20200501.11},
  url = {https://doi.org/10.11648/j.ijafrm.20200501.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20200501.11},
  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.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - Impact of European Funds on Value Creation of Portuguese Companies
AU  - Nuno Teixeira
AU  - Luís Vitorino
AU  - Rui Brites
AU  - Teresa Godinho
Y1  - 2020/03/10
PY  - 2020
N1  - https://doi.org/10.11648/j.ijafrm.20200501.11
DO  - 10.11648/j.ijafrm.20200501.11
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 1
EP  - 11
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20200501.11
AB  - 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.
VL  - 5
IS  - 1
ER  -

Copy | Download

Author Information

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

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Nuno Teixeira, Luís Vitorino, Rui Brites, Teresa Godinho. (2020). Impact of European Funds on Value Creation of Portuguese Companies. International Journal of Accounting, Finance and Risk Management, 5(1), 1-11. https://doi.org/10.11648/j.ijafrm.20200501.11

Copy | Download

ACS Style

Nuno Teixeira; Luís Vitorino; Rui Brites; Teresa Godinho. Impact of European Funds on Value Creation of Portuguese Companies. Int. J. Account. Finance Risk Manag. 2020, 5(1), 1-11. doi: 10.11648/j.ijafrm.20200501.11

Copy | Download

AMA Style

Nuno Teixeira, Luís Vitorino, Rui Brites, Teresa Godinho. Impact of European Funds on Value Creation of Portuguese Companies. Int J Account Finance Risk Manag. 2020;5(1):1-11. doi: 10.11648/j.ijafrm.20200501.11

Copy | Download

@article{10.11648/j.ijafrm.20200501.11,
  author = {Nuno Teixeira and Luís Vitorino and Rui Brites and Teresa Godinho},
  title = {Impact of European Funds on Value Creation of Portuguese Companies},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {5},
  number = {1},
  pages = {1-11},
  doi = {10.11648/j.ijafrm.20200501.11},
  url = {https://doi.org/10.11648/j.ijafrm.20200501.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20200501.11},
  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.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - Impact of European Funds on Value Creation of Portuguese Companies
AU  - Nuno Teixeira
AU  - Luís Vitorino
AU  - Rui Brites
AU  - Teresa Godinho
Y1  - 2020/03/10
PY  - 2020
N1  - https://doi.org/10.11648/j.ijafrm.20200501.11
DO  - 10.11648/j.ijafrm.20200501.11
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 1
EP  - 11
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20200501.11
AB  - 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.
VL  - 5
IS  - 1
ER  -

Copy | Download