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)

An equivalent analysis can be undertaken on a cohort of MNC's
classified as non-R&D spending plants or as R&D spending plants, but
only for shorter time horizon of 1986-1996, because of the shorter duration
which our R&D data cover relative to the employment data in the previous
lifetable analysis.

(Figures 2(A) and 2(B))

Taking a cohort of plants (ten or more employees in 1986) it is possible to
examine whether the average annual R&D spend of a foreign-owned plant
had any bearing on the probability that the plant remained operational
(survived) in Ireland over the period 1986-1996. Figure 2(A) illustrates the
two survival functions graphically, for R&D-spending subsidiaries and
non-R&D spending subsidiary plants, respectively. Those foreign-owned
plants which engage in R&D spend have a greater probability of remaining
in Ireland for a given time period than non-R&D spending plants. The
probability of a non-R&D-active MNC remaining ten years is over 60 per
cent (Table A2) relative to an equivalent probability of almost 90 per cent
for R&D spending plants. When we make a distinction within R&D
spending plants according to the scale of R&D spend (Figure 2(B)), we
find that the probability of a plant remaining in Ireland for a given time
period increases with the scale of R&D activity. In Table A2 we see that
the probability of a large R&D spender remaining in Ireland for ten years
is over ninety per cent relative to eighty five per cent for a small R&D
spender and relative to sixty one per cent for a non-R&D spending MNC.

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