The European Investment Bank nances projects of medium and large sized
rms through "project loans". Because they involve favorable conditions such as low
interest rates and a long repayment period, there is a question of whether the EIB
could be distorting market competition and reinforcing eventual dominant positions.
This paper aims to empirically test this hypothesis. Using data from Portuguese
rms between 2007 and 2015, we use an empirically robust estimator to assess the
impact of project loans on rms' market shares, which proxies market power. As
a byproduct of this research, we also investigate the impact on rms' investment
rate. We nd no evidence that assisted rms experience abnormal increases in their
market shares in the years that follow the attribution of the loans. Thus, we fail to
reject the hypothesis that project loans do not distort market competition
