Ireland was one of the first countries in the world to adopt an FDI-oriented development strategy. It remains to this day the most FDI-intensive economy in Europe. These factors have helped configure the institutional structure of the economy to be able to respond rapidly to changes in the...

Geographical diversification describes the degree to which a firm’s operations in a particular industry are dispersed across countries. This paper presents evidence on the geographical diversification within the EU of the 290-odd largest manufacturing firms in Europe. We also explore how...

The information technology sector in Europe, comprising the production of computer hardware and software, is disproportionately located on the continent’s western periphery. The vast bulk of computers sold in Europe in the 1990s were assembled either in Ireland or Scotland, while Ireland also...

Many previous studies have shown that the localisation of firms can be an important factor in attracting new foreign direct investment into a host country. What has been missing in this literature thus far, however, is an investigation into the reasons why industry clusters attract firms. We...

Ireland’s dramatic economic boom of the 1990s has been referred to as “the era of the Celtic Tiger”. In a little over a decade, real national income per head jumped from 65 percent of the Western European average to above parity, unemployment tumbled from double to less than half the...

For a given degree of wage stickiness, there is an inverse relationship between the price-level and employment effects of a nominal shock. Various contributors to the literature on optimal currency areas have extrapolated from this to argue that the real effects of exchange rate changes are...

FDI and the activities of foreign affiliate firms have grown dramatically in recent decades, both in absolute terms and as a share of world GDP. Most explanations of this phenomenon focus on the impact of the macroeconomic environment on the choices facing individual firms over whether or not to...

The Investment Development Path (IDP) hypothesis holds that a country’s net outward direct investment position is systematically related to its level of economic development. Ireland is an interesting test case because of the importance of inward FDI over the last three decades, the country's...

FDI and the activities of foreign affiliate firms have grown dramatically in recent decades, both in absolute terms and as a share of world GDP. Most explanations of this phenomenon focus on the impact of the macroeconomic environment on the choices facing individual firms over whether or not to...

Industrial sectors producing income-elastic products can grow rapidly but are highly vulnerable to fluctuations in the world economy. Policymakers need to take into account this trade-off between output and employment growth over the longer term and volatility in the short to medium term. We...