Investment incentives targeted at attracting multinational firms have been extensively documented and researched, and empirical evidence has shown them to be influential. The same is not true of exit costs. Yet, as recent theory suggests, there may be a trade-off between entry incentives and...

This paper presents an empirical study of the effect of foreign multinational companies on the entry of indigenous firms in the fost country, using data for the Irish manufacturing sector. Our starting point is a recent paper by Markusen and Venables (1999), that shows formally that...