Do Environmental Projects Funded by European Structural Investment Funds Enhance Firm Performance in Portugal? The Role of Company Size

This study evaluates the effectiveness of business innovation policies in the field of environmental technology in Portugal through the COMPETE 2014–2020 programme. Funded by the European Union’s Structural Funds, this initiative primarily targeted less-developed Portuguese regions to foster innovation and sustainable growth. Our analysis examines the programme's impact on key business performance indicators, distinguishing between projects with explicit environmental and sustainability objectives and those without such goals. Using the Propensity Score Matching methodology, we assess the causal effects of the programme on firm-level outcomes. The findings reveal mixed results across the indicators, highlighting both the potential and limitations of innovation policies in advancing environmental and economic objectives.