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)

measures of R&D activity undertaken by foreign-owned plants in Ireland.
These empirical measures, derived from plant-level data, provide a new
perspective on the extent of these R&D activities. 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 R&D-active MNC plants in Ireland have (i) a higher
probability of remaining operational in Ireland for a given time period and
(ii) create a higher quantity and quality of employment, relative to non-
R&D active MNC plants.

Section 2 describes our plant-level dataset. In Section 3 we compare
our estimates of R&D activities of MNCs in Ireland with the aggregate
statistics provided by the OECD. In Section 4 we outline our expectations
of a relationship between investment in R&D and the subsequent
performance of MNC subsidiaries in Ireland. In Sections 5 and 6 we
compare the survival experiences and the employment performance
respectively of R&D-active MNCs, relative to non-R&D active MNCs.
The final section contains a short summary and some conclusions.

II Data & Sectoral Classification

The data set explored here is a unique combination of two sources.
The R&D data are drawn from a series of surveys of R&D performing
plants, undertaken by the policy and advisory board for industrial
development in Ireland (Forfas). This organisation has statutory
responsibility for R&D statistics in Ireland. For the years 1986 to 1995,
the biannual surveys reported data on the population of R&D performers

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