Now showing 1 - 2 of 2
  • Publication
    Foreign direct investment, agglomerations and demonstration effects : an empirical investigation
    (University College Dublin. School of Economics, 2001-03) ; ;
    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 distinguish between “efficiency agglomerations” as firms locating close to each other because they can increase their efficiency by doing so, and “demonstration effects”, whereby existing firms send signals to new investors as to the reliability of the host country and newly entering firms follow previous firms. In this paper we try to disentangle these two effects, by examining the location of US and UK firms in Ireland. We calculate proxies for “efficiency agglomerations” and “demonstration effects” and include these proxies in an empirical model of the location decision of firms. For US firms, we find that both efficiency agglomeration and demonstration effects are important determinants of entry. For UK firms, however, the evidence is not as clear cut.
      599
  • Publication
    Multinational companies, backward linkages and labour demand elasticities
    (University College Dublin; School of Economics, 2006-12) ; ; ;
    This paper investigates the link between nationality of ownership and wage elasticities of labour demand at the level of the plant. In particular, we examine whether labour demand in multinationals becomes less elastic with respect to the wage if the plant has backward linkages with the local economy. Our empirical evidence, based on a rich plant level dataset, shows that the extent of local linkages indeed reduces the wage elasticity of labour demand. This result is economically important and holds for a number of different specifications.
      383