Some aspects of foreign private investment in manufacturing sector of economy of Irish republic

Abstract

Attention has recently been drawn to the influx of foreign capital into the Republic of Ireland and to the importance of Foreign Private Investment (FPI) in the development of the Irish economy. The following article attempts to examine several consequences of this inflow. The first section briefly reviews Irish economic policy and estimates the extent of recent Foreign Private Investment. The importance of foreign investment for the economy is assessed in section two. In the third section, the hypothesis that the FPI has led to a dualistic structure in Irish industry is tested. Section four extends this by looking at the proportion of the output of foreign firms which remains in Ireland after first round payments ('Retained Value'). The conclusion reviews the development policy of Ireland in the light of the foregoing analysis.