Established exporting companies main benefactors of RRP
Older exporting companies are the main beneficiaries of the Resilience and Recovery Plan (RRP) according to a study from the Bank of Portugal (BdP) published on Thursday.
The report also concluded that funds were channelled to the most productive companies, but this conclusion only holds true if companies whose productivity is significantly higher than the national average are discounted from the comparison.
“The comparison with non-financial private companies in the Portuguese economy reveals that the companies benefiting from the RRP have an average and median age higher than that observed in the economy as a whole, regardless of size,” reads the October Economic Bulletin. “The beneficiary companies are, on average, 11 years older”, the study specifies.
“With regard to opening up to overseas markets, the beneficiary companies stand out because they export more, this particularly standing out for micro-enterprises and SMEs, where the share of exports reaches, on average, 32% of turnover, contrasting with the 7% observed in the total of these companies,” the document adds.
“These companies also tend to be more productive. Despite this, in large companies, the average is much lower, due to a minority of non-beneficiary companies with very high productivity”, explains the BdP, which supports its conclusion by the fact that the average is higher in the companies benefiting from the RRP and the 75th percentile is higher. Outliers are observations that are “above the third quartile* plus 1.5 times the interquartile* range.”
The study also reveals that the number of entities with approved projects is similar between micro, small, medium and large companies. However, as expected, the average amount approved per entity is higher in large companies. But the study, based on data from Recuperar Portugal (Recovery Portugal) and Simplified Business Information from 2022, shows that almost half of the approved funds are intended for micro and small companies.
*In statistics, quartiles are a type of quantiles which divide the number of data points into four parts, or quarters, of more-or-less equal size. The data must be ordered from smallest to largest to compute quartiles; as such, quartiles are a form of order statistic. The three quartiles, resulting in four data divisions, are as follows:
The first quartile (Q1) is defined as the 25th percentile where lowest 25% data is below this point. It is also known as the lower quartile.
The second quartile (Q2) is the median of a data set; thus 50% of the data lies below this point.
The third quartile (Q3) is the 75th percentile where lowest 75% data is below this point. It is known as the upper quartile, as 75% of the data lies below this point.