Essays on labour productivity, technical efficiency and foreign direct investment in Irish manufacturing industry

Abstract

The aim of this thesis is to investigate the structural change that took place in the Irish manufacturing sector during the 1990s. Chapter 2 examines the patterns and growth of labour productivity and employment in Irish manufacturing industry over the 1990s for both domestic and foreign firms separately using 2-digit industry level data. We show that over the period overall labour productivity growth was 158 per cent. An examination of this growth by nationality of ownership shows that labour productivity growth has been much higher in foreign firms than it has been in their domestic counterparts, 185 per cent and 37 per cent for foreign and domestic firms, respectively which shows evidence of divergence of labour productivity in the Irish manufacturing sector between foreign and domestic firms. Our analysis of the sectoral growth rates in productivity between 1991 and 1999 shows that the sectors that are experiencing greater productivity growth are not the same for foreign as for Irish firms. Thus there is little evidence of convergence in productivity levels between domestic and foreign firms across sectors during the 1990s.