The purpose of this article is to study the relationship between the competitiveness of small- and medium-sized companies and the public support offered to them in the form of direct subsidies allocated through European structural funds. Using micro-data gathered by the Operational Programme Enterprise and Innovations for Competitiveness (OPEIC) of European structural funds from 2007–2013, this analysis focuses on small- and medium-sized enterprises (SMEs) in the Czech Republic. We employed a counterfactual approach based on Propensity Score Matching (PSM), Nearest Neighbour Estimator and Difference in Difference design with two groups of companies: applicants receiving support and a control group. When using value added and value added per labour cost as the competitiveness indicators for SMEs, we found that Cohesion Policy (CP) support had no statistically significant impact on these indicators. On the other hand, we a found positive impact on personnel expenditure. These results highlight a number of doubts regarding the effectiveness of SME cohesion funding, given that a rise in personnel expenditure, which is not supported by an appropriate increase in added value, is unlikely to be sustainable.

A substantial part of contemporary R&D policy in developed countries is focused on the support of R&D in the private sector. Such intervention is theoretically justified by a higher propensity to innovation and consequently to higher competitiveness, which promotes sustainable economic growth. Most of the empirical research done so far focuses mainly on the leverage effect, the effect on innovation activity or on estimating the crowding out effect of public support. Although the outcomes of this research are quite contradictory, only a few studies focus on the effect of public support of private R&D on the private bodies’ performance indicators, which are naturally connected with a company’s economic sustainability. In this article we use counterfactual design and show that the R&D policy of supporting the private sector leads to higher innovation activity, but it does not lead to higher value added and productivity for supported subjects, at least in the short run. Such a finding suggests a possible flaw in R&D policy implementation—it is questionable if higher innovation activity is truly effective if it is not followed by a positive effect on production (value added) and productivity, and if it does not have a positive effect on competitiveness or lead to sustainable economic growth.

The study contributes to underdeveloped knowledge on effects of SME policies in Central and Eastern Europe. We evaluate two Czech credit guarantee schemes funded from EU funds during years 2007–2013. We conduct micro-econometric firm-level impact evaluation based on propensity score matching approach. We estimate average treatment effect on the treated (ATET) for six financial outcome variables (total assets, tangible fixed assets, personnel costs, sales, price-cost-margin and return on assets) measuring firm´s competitiveness. Two years after the programme, no statistically conclusive results were obtained for the most of the outcome variables. We found only a positive change in tangible fixed assets for the programme participants. However, we cannot say, that the supported firms would be better off, compared to those non-supported in a short-term. Our analysis shows that without reliable data gathered by public sector authorities, no rigorous evaluations can be made and thus no evidence driven policies can be formed.

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