Multinational enterprises (MNEs) have played an important, if not crucial, role in the recent development of the economy of Ireland, both North and South. This paper compares the extent to which MNE plants, North and South are integrated into their host economies through local sourcing. This is important both in terms of the direct effect on local demand but also because local trading relationships provide a medium for technology transfer and supplier development. Levels of local sourcing, North and South, have diverged sharply over the last 15 years. In the South, local supply chains have grown stronger with MNE plants now purchasing around 21 per cent of their material inputs from within the country. In the North, by contrast, local supply chain linkages have become weaker with only around 11 per cent of MNE inputs now sourced from within the region. Strong asymmetries are also identified in cross-border sourcing; Northern MNE plants spend an average of £2.4m pa in the South, while Southern MNE plants spend an average of only £0.4m pa in the North. Differences in the characteristics of MNE plants, North and South, account for only a quarter of the difference between the Southern and Northern levels of local sourcing. Supply-side issues - related primarily to availability - seem likely to explain the majority of the remainder
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Paper provided by Economic Research Institute of Northern Ireland in its series Working Papers NIERC. with number
71.
Find related papers by JEL classification: R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography) R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy
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