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)



with ten or more employees in the manufacturing and internationally-
traded services sectors.4 The employment data (1980-1996) are drawn
from the annual employment surveys undertaken by the same agency.
Similar to the R&D data, these employment surveys cover the population
of plants in the manufacturing and internationally traded service sectors.5
The employment survey data covers all plants and in matching the two
Forfas surveys, we have excluded any plant with less than ten employees
through the period 1980 to 1996.6 In the analysis that follows, where a
variable is not available for all of the surveys of technology in industry, we
report the last year for which that variable is available. For example, when
estimating the percentage of R&D spend that is invested in experimental
development, we note that this information is available for the period
1986-1993 only. No information on this variable is provided in the 1995
survey.

We define an MNC plant or a foreign-owned plant as any plant
where in excess of fifty percent of the equity is held by non-Irish residents
- this is the classification used in both surveys. Because a plant's current
(i.e., 1996) nationality only is maintained in the dataset, we are unable to
take account of any changes in ownership during the period 1980-1996. 7

Throughout this paper we use the OECD sectoral classification to
aggregate sectors into four groups:

4 The biannual surveys switched to odd number years in 1991, thereby following immediately after the
1990 survey of technology in industry. Forfas estimates a response rate close to 100% for this survey.
There is an additional survey of innovation in Irish manufacturing in 1992.

5 The response rate is greater than 90% for this survey (Strobl, 1996)

6 Forfas was established in 1993 and involved the merger of the planning division of the Industrial
Development Authority (IDA) which began its employment surveys in 1973 and the Science and
Technology Division of Eolas, which began its employment surveys in 1967.

7 The effect of this is that some indigenous firms which are taken over by foreign-owned firms during
that period are classified as foreign firms.



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