Assessing the Early Impact of InvestEU on Romanian SME Financial Performance

This article examines how European funding enhances the financial performance of Romanian SMEs, a sector facing growing regulatory pressure, market volatility, and resource constraints. The study combines a thematic analysis of InvestEU indicators and national SME financing data (2021–2023) with a firm-level difference-in-differences model comparing InvestEU-funded SMEs to a matched control group over 2023–2024. The qualitative evidence shows that InvestEU operates at the EU level as a multidimensional policy instrument fostering competitiveness, social inclusion, and long-term economic and environmental development, while Romanian SMEs continue to rely predominantly on their own funds and national co-financing, a conservative pattern that ensures stability but limits access to external capital and transformative investments. Econometric results indicate that funded SMEs record, on average, higher turnover and net profit growth than comparable non-funded firms and confirm a strong positive association between firm size and financial performance; however, the interaction term capturing the specific InvestEU effect is positive but not statistically significant at the 95% confidence level. The findings suggest that InvestEU has the potential to act as a catalyst for structural change but also highlight the need for longer observation periods, larger samples, and more comprehensive development indicators to assess its medium-and long-term impact on SME competitiveness.