The Tangible Contribution of R&D Spending Foreign-Owned Plants to a Host Region: a Plant Level Study of the Irish Manufacturing Sector (1980-1996)

provided by Research Papers in Economics

The Tangible Contribution of R&D Spending Foreign-Owned Plants
to a Host Region: a Plant Level Study of the Irish Manufacturing
Sector (1980-1996)

Trinity Economic Paper Series
Technical Paper No. 99/7
JEL Classification: F23, O30

Abstract

Using plant level data from the Irish manufacturing sector, we explore the
relationship between foreign direct investment (FDI) and economic growth
in Ireland. The central question explored in this paper is whether the
tangible contribution of MNC plants which undertake R&D investment in
Ireland is greater than the tangible contribution of MNC plants which
undertake no R&D investment. We conclude that the scale of R&D
activity in a plant is an important determinant in (i) lengthening the
duration over which that plant will remain in Ireland and (ii) in improving
the quality of employment created in that plant.

^* Correspondence to: Professor Frances Ruane / Allan Kearns, Department of Economics, Trinity
College, Dublin 2, Ireland. Tel: + 353 1 6081325, fax: + 353 1 6772503 or Email fruane@tcd.ie or
kearnsa@tcd.ie.

This paper is supported by Science and Technology Division of Forfas. We gratefully acknowledge
the provision of data for this study by Forfas and the help given by Marcus Breathnach and his
colleagues in the Science and Technology Division in preparation of this paper. Allan Kearns also
acknowledges the financial assistance of the Royal Irish Academy Social Science Research Council,
Ireland. We also thank Marcus Breathnach, Holger Gorg and Mary Keeney and participants at the
INTECH Euroconference on Industrial Structure, Innovation Dynamics and Technology Policy
(October 1998).The views expressed in this paper are the authors' and do not reflect the views of the
Department of Economics, Trinity College, Dublin.

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