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)

There are several reasons why the employment might be of a higher
quality. The first reason is simply that R&D personnel will be employed
directly, which will typically not be the case in a non-R&D-active plant.
The second reason is that plants which undertake R&D in Ireland are
hypothesised (confirmed later on) to remain operational in Ireland for
longer time periods than plants which do not undertake R&D. Thus there
is a higher probability that an individual job that is created today will exist
for longer than an equivalent position in a non-R&D-active plant. Thirdly,
plants which undertook R&D as an input into the innovation process have
also invested heavily in other aspects of innovation. Breathnach and
Fitzgerald (1994) noted that R&D expenditures in 1990 amounted to 36
per cent of all expenditure undertaken by foreign-owned plants on
innovation. These plants spent a further 3 per cent on patents and licences,
31 per cent on product design, 21 per cent on trial production and 8 per
cent on market analysis. Thus plants which engage in R&D activity seem
to engage in these other categories of activity, in order to apply the fruits
of their R&D activities commercially. All of these activities require highly-
skilled individuals, the demand for whom would be much greater than in
an assembly plant.

V Duration of MNC's in Irish manufacturing
(A) Lifetable Analysis

The idea underlying the policy of attracting (a) FDI in higher-
technology sectors and (b) R&D spending plants as opposed to non-R&D
spending plants, is the belief that these plants will have a lower propensity
to exit the Irish manufacturing sector. Figure 1 shows us the probabilities

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