Skip to main content

Foreign Direct Investment in Ireland: Policy Implications for Emerging Economies

  • Chapter
Foreign Direct Investment, China and the World Economy
  • 1047 Accesses

Abstract

The increasingly important role of multinational enterprises (MNEs) in the global economy is linked to questions of how the foreign direct investment (FDI) they control impacts on overall economic activity in the recipient countries. Of specific interest is the policy context in which such FDI flows into the developing country and how a government can influence the impact of those flows. This paper reviews some of the literature in two key contextual areas, namely, when the host country policy regime promotes FDI selectively, and secondly, where it promotes the creation of industrial clusters. It explores the insights of this literature for the development of the strong MNE sector in the Irish economy and draws lessons from the Irish experience for emerging economies.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Antonelli, C. (1998) ‘The Dynamics of Localized Technological Changes. The Interaction between Factor Costs Inducement, Demand Pull and Schum-peterian Rivalry’, Economics of Innovation and New Technology, 6, 2–3, 97–120.

    Article  Google Scholar 

  • Balasubramanyam, V.N. and A. Balasubramanyam (2000) ‘The Software Cluster in Bangalore’, in J.H. Dunning (ed.), Regions, Globalization and the Knowledge-based Economy (Oxford: Oxford University Press).

    Google Scholar 

  • Balasubramanyam, V.N. and V. Mahambare (2004) ‘Foreign Direct Investment in India’, in Y.A. Wei and V.N. Balasubramanyam (eds), Foreign Direct Investment — Six Country Case Studies (Cheltenham: Edward Elgar).

    Google Scholar 

  • Baptista, R. (1998) ‘Clusters, Innovation, and Growth’, in P. Swarm, M. Prevezer and D. Stout (eds), The Dynamics of Industrial Clustering: International Comparisons in Computing and Biotechnology (Oxford: Oxford University Press) 13–51.

    Google Scholar 

  • Barrios, S., L. Bertinelli and E. Strobl (2003) ‘Multinationals and Local Indigenous Development’, CORE Discussion Paper 2003/05.

    Google Scholar 

  • Barrios, S., H. Görg and E. Strobl (2002) ‘Multinationals’ Location Choice, Agglomeration Economies and Public Incentives’, GEP Research Paper 02/33.

    Google Scholar 

  • Bhagwati, J.N. (1988) Protectionism (Cambridge, MA: MIT Press).

    Google Scholar 

  • Bhagwati, J.N. (1993) India in Transition: Freeing the Economy (Oxford: Oxford University Press).

    Book  Google Scholar 

  • Bhagwati, J.N. (2004) In Defence of Globalisation (Oxford: Oxford University Press).

    Google Scholar 

  • Blomström, M. (1991) ‘Host Country Benefits of Foreign Investment’, in D.G. McFetridge (ed.), Foreign Investment, Technology and Economic Growth (Calgary: University of Calgary Press).

    Google Scholar 

  • Blomström, M. and A. Kokko (1996a) The Impact of Foreign Investment on Host Countries: A Review of the Empirical Evidence (Washington, DC: World Bank).

    Google Scholar 

  • Blomström, M. and A. Kokko (1996b) Multinational Corporations and Spillovers (London: Centre for Economic Policy Research).

    Google Scholar 

  • Blomström, M., A. Kokko and M. Zejan (1994) ‘Host Country Competition, Labor Skills and Technology Transfer by Multinationals’, Weltwirtschaftliches Archiv, 130, 3, 521–33.

    Article  Google Scholar 

  • Blomström, M., A. Kokko and M. Zejan (2000) Foreign Direct Investment, Firm and Host Country Strategies (London: Macmillan).

    Google Scholar 

  • Bradley, J. (2004) ‘Changing the Rules: How the Failures of the 1950s Forced a Transition in Economic Policy-making’, Administration, 52, 1, 92–107.

    Google Scholar 

  • Braunerhjelm, P., R. Faini, V. Norman, F. Ruane and P. Seabright (2000) Integration and the Regions of Europe: How the Right Policies can Prevent Polarisation (London: Centre of Economic Policy Research).

    Google Scholar 

  • Buckley, P.J. (1988) ‘The Limits of Explanation: Testing the Internalisation Theory of the Multinational Enterprise’, Journal of International Business Studies, 19, 2, 181–93.

    Article  Google Scholar 

  • Buckley, P.J. (1996) ‘The Role of Management in International Business Theory: A Meta-analysis and Integration of the Literature on International Business and International Management’, Management International Review, 36, 1, 7–54.

    Google Scholar 

  • Buckley, P.J. (2004) ‘The Role of China in the Global Strategy of Multinational Enterprises’, Journal of Chinese Economic and Business Studies, 2, 1, 1–25.

    Article  Google Scholar 

  • Buckley, P.J. and M. Casson (1976) The Future of the Multinational Enterprise (London: Macmillan).

    Book  Google Scholar 

  • Buckley, P.J. and F. De Beule (2005) ‘The Research Agenda in International Business: Past, Present and Future’, in L. Cuyvers and F. De Beule (eds.), Transnational Corporations and Economic Development: From Internationalisation to Globalisation (London: Palgrave).

    Google Scholar 

  • Buckley, P.J. and C. Meng (2005) ‘The Strategy of Foreign Invested Manufacturing Enterprises in China: Export Orientated and Market Orientated FDI Revisited’, Journal of Chinese Economic and Business Studies, 3, 2, 111–31.

    Article  Google Scholar 

  • Buckley, P.J., J. Clegg and C. Wang (2002) ‘The Impact of Inward FDI on the Performance of Chinese Manufacturing Firms’, Journal of International Business Studies, 33, 4, 637–55.

    Article  Google Scholar 

  • Cooke, P. (1998) ‘Enterprise Support Policies in Dynamic European Regions: Policy Implications for Ireland’, in National Economic and Social Council (ed.), Sustaining Competitive Advantage: Proceedings of NESC Seminar (Dublin: NESC) 68–88.

    Google Scholar 

  • Dicken, P. (1998) Global Shift: Transforming the World Economy (London: Paul Chapman).

    Google Scholar 

  • Dunning, J.H. (1988) Explaining International Production (London: Unwin Hyman).

    Google Scholar 

  • Dunning, J.H. (1993) Multinational Enterprise and the Global Economy (Working-ham: Addison-Wesley).

    Google Scholar 

  • Dunning, J.H. (1995) ‘The Role of Foreign Direct Investment in a Globalizing Economy’, Banca Nazionale del Lavoro Quarterly Review, 48, 193, 125–44.

    Google Scholar 

  • Dunning, J.H. (1996) ‘The Geographical Sources of the Competitiveness of Firms: Some Results of a New Survey’, Transnational Corporations, 5, 3, 1–29.

    Google Scholar 

  • Dunning, J.H. (1998) ‘Globalization, Technological Change and the Spatial Organization of Economic Activity’, in A.D. Chandler, Jr., P. Hagström and Ö. Sölvell (eds), The Dynamic Firm: The Role of Technology, Strategy, Organisation and Regions (Oxford: Oxford University Press).

    Google Scholar 

  • Dunning, J.H. and R. Narula (1996) Foreign Direct Investment and Governments: Ca talysts for Economic Restructuring (London and New York: Routledge).

    Google Scholar 

  • Enright, M. (1990) Geographic Concentration and Industrial Organization (Cambridge, MA: Harvard University Press).

    Google Scholar 

  • Enright, M.J. (1998) ‘Regional Clusters and Firm Strategy’, in A.D. Chandler, Jr., P. Hagström and Ö. Sölvell (eds), The Dynamic Firm: The Role of Technology, Strategy, Organization and Regions (Oxford: Oxford University Press).

    Google Scholar 

  • Enright, M.J. (2000) ‘The Globalization of Competition and the Localization of Competitive Advantage: Policies Towards Regional Clustering’, in N. Hood and S. Young (eds), The Globalization of Multinational Enterprise Activity and Economic Development (London: Macmillan).

    Google Scholar 

  • Florida, R. (1995) ‘Toward the Learning Region’, Futures, 27, 5, 527–36.

    Article  Google Scholar 

  • Frost, T.S. (1998) ‘The Geographic Sources of Innovation in the Multinational Enterprise: US Subsidiaries and Host Country Spillovers: 1980–1990’, Sloan School of Management (Cambridge, MA: Massachusetts Institute of Technology).

    Google Scholar 

  • Glasmeier, A. (1988) ‘Factors Governing the Development of High Tech Industry Agglomerations: A Tale of Three Cities’, Regional Studies, 22, 4, 287–301.

    Article  Google Scholar 

  • Goodman, E. and J. Bamford (1989) Small Firms and Industrial Districts in Italy (London and New York: Routledge).

    Google Scholar 

  • Görg, H. (2000) ‘Outward Direct Investment from Ireland to the US: Evidence and Further Issues’, Journal of the Statistical and Social Inquiry Society of Ireland, 30, 33–52.

    Google Scholar 

  • Görg, H. and F. Ruane (2000) ‘An Analysis of Backward Linkages in the Irish Electronics Sector’, Economic and Social Review, 31, 3, 215–35.

    Google Scholar 

  • Görg, H. and F. Ruane (2001) ‘Multinational Companies and Linkages: Panel-data Evidence for the Irish Electronics Sector’, International Journal of the Economics of Business, 18, 1, 1–18.

    Article  Google Scholar 

  • Gray, A.W. (ed.) (1997) International Perspectives on the Irish Economy (Dublin: Indecon).

    Google Scholar 

  • Gray, M. and E. Golob (1996) ‘Big Firms, Long Arms, Wide Shoulders: The “Hub-and-Spoke” Industrial District in the Seattle Region’, Regional Studies, 30, 7, 651–66.

    Article  Google Scholar 

  • Huang, Y. (2003) Selling China: Foreign Direct Investment During the Reform Era (Cambridge: Cambridge University Press).

    Google Scholar 

  • Hymer, S.H. (1960) The International Operations of National Firms (Cambridge, MA: MIT Press).

    Google Scholar 

  • Knickerbocker, F.T. (1973) Oligopolistic Reaction and the Multinational Enterprise (Cambridge, MA: Harvard University Press).

    Google Scholar 

  • Krugman, P.R. (1997) ‘Good News from Ireland: A Geographical Perspective’, in A.W. Gray (ed.), International Perspectives on the Irish Economy (Dublin: Indecon) 38–53.

    Google Scholar 

  • Malmberg, A. and Ö. Sölvell (1996) ‘Spatial Clustering, Local Accumulation of Knowledge and Firm Competitiveness’, Geografiska Annaler, 78, 2, 85–97.

    Article  Google Scholar 

  • Markusen, A. (1994) ‘Studying Regions by Studying Firms’, The Professional Geographer, 46, 4, 477–90.

    Article  Google Scholar 

  • Markusen, A. (1996) ‘Sticky Places in Slippery Space: A Typology of Industrial Districts’, Economic Geography, 72, 3, 293–313.

    Article  Google Scholar 

  • Marshall, A. (1890) Principles of Economics (London: Macmillan).

    Google Scholar 

  • O’Doherty, D. (1998) ‘Networking in Ireland — Policy Responses’, in National Economic and Social Council (ed.), Sustaining Competitive Advantage: Proceedings of NESC Seminar (Dublin: NESC) 89–115.

    Google Scholar 

  • O’Donnellan, N. (1994) ‘The Presence of Porter’s Sectoral Clustering in Irish Manufacturing’, Economic and Social Review, 25, 3, 221–32.

    Google Scholar 

  • OECD (1999) Boosting Innovation: The Cluster Approach (Paris: OECD).

    Google Scholar 

  • Paniccia, I. (1998) ‘One, a Hundred, Thousands of Industrial Districts. Organizational Variety in Local Networks of Small and Medium-sized Enterprises’, Organization Studies, 19, 4, 667–700.

    Article  Google Scholar 

  • Peck, F.W. (1996) ‘Regional Development and the Production of Space: The Role of Infrastructure in the Attraction of New Inward Investment’, Environment and Planning A, 28, 2, 327–39.

    Article  Google Scholar 

  • Pedersen, P.O. (1994) ‘Clusters of Enterprises within Systems of Production and Distribution: Collective Efficiency, Transaction Costs and the Economies of Agglomeration (Copenhagen: Centre for Development Research).

    Google Scholar 

  • Pedersen, P.O. (1997) ‘Clusters of Enterprises within Systems of Production and Distribution: Collective Efficiency, Transaction Costs and the Economies of Agglomeration’, in M.P. Van Dijk and R. Rabellotti (eds), Enterprise Clusters and Networks in Developing Countries (London: Cass).

    Google Scholar 

  • Piore, M.J. and C.F. Sabel (1984) The Second Industrial Divide (New York: Basic Books).

    Google Scholar 

  • Porter, M.E. (1994) ‘The Role of Location in Competition’, Journal of the Economics of Business, 1, 1, 35–39.

    Article  Google Scholar 

  • Porter, M.E. (1996) ‘Competitive Advantage, Agglomeration Economies, and Regional Policy’, International Regional Science Review, 19, 1–2, 85–94.

    Google Scholar 

  • Porter, M.E. and Ö. Sölvell (1997) ‘The Role of Geography in the Process of Innovation and the Sustainable Competitive Advantage of Firms’, in A.D. Chandler, Jr., P. Hagström and Ö. Sölvell (eds), The Dynamic Firm: The Role of Technology, Strategy, Organizations, and Regions (Oxford: Oxford University Press).

    Google Scholar 

  • Rosecrance, R. (1996) ‘The Rise of the Virtual State’, Foreign Affairs, 75, 4, 45–61.

    Article  Google Scholar 

  • Ruane, F. and J. Sutherland (2005) ‘Export Characteristics of Irish Manufacturing Industry’ forth-coming in The World Economy.

    Google Scholar 

  • Rugman, A.M. (1975) ‘Motives for Foreign Investment: The Market Imperfections and Risk Diversification Hypothesis’, Journal of World Trade Law, 9 (September-October), 567–73.

    Google Scholar 

  • Rugman, A.M. (1979) International Diversification and the Multinational Enterprise (Lexington, MA: Lexington Books).

    Google Scholar 

  • Schmitz, H. (1989) Flexible Specialization. A New Paradigm of Small-scale Industrialization (Sussex: Institute of Development Studies).

    Google Scholar 

  • Scott, A.J. (1988) ‘Flexible Production Systems and Regional Development: The Rise of New Industrial Space in North America and Western Europe’, International Journal of Urban and Regional Research, 12, 2, 171–86.

    Article  Google Scholar 

  • Sölveil, Ö. and I. Zander (1998), ‘International Diffusion of Knowledge: Isolating Mechanisms and the Role of the MNE’, in A.D. Chandler, Jr., P. Hagström and Ö. Sölvell (eds), The Dynamic Firm: The Role of Technology, Strategy, Organization and Regions (Oxford: Oxford University Press).

    Google Scholar 

  • Storper, M. (1989) ‘The Transition to Flexible Specialisation in the U.S. Film Industry: External Economies, the Division of Labour, and the Crossing of Industrial Divides’, Cambridge Journal of Economics, 13, 2, 273–305.

    Google Scholar 

  • Storper, M. and A. Scott (1987) ‘The Wealth of Regions. Market Forces and Policy Imperatives in Local and Global Context’, Futures, 27, 5, 505–26.

    Article  Google Scholar 

  • UNCTAD (1997) World Investment Report, 1997: Transnational Corporations, Market Structure and Competition Policy (Geneva: United Nations).

    Google Scholar 

  • Vernon, R. (1966) ‘International Investment and International Trade in the Product Cycle’, Quarterly Journal of Economics, 80, 2, 190–207.

    Article  Google Scholar 

  • Wei, Y.A. (2004) ‘Foreign Direct Investment in China’, in Y.A. Wei and V.N. Balasubramanyam (eds), Foreign Direct Investment — Six Country Case Studies (Cheltenham: Edward Elgar).

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Copyright information

© 2010 Peter J. Buckley and Trances Ruane

About this chapter

Cite this chapter

Buckley, P.J., Ruane, F. (2010). Foreign Direct Investment in Ireland: Policy Implications for Emerging Economies. In: Foreign Direct Investment, China and the World Economy. Palgrave Macmillan, London. https://doi.org/10.1057/9780230248328_16

Download citation

Publish with us

Policies and ethics