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Promoting Industrial Clusters: Evidence from Ireland

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Author Info
Frances Ruane
Anne Marie Gleeson
Julie Sutherland

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Abstract

This paper analyses the spatial concentration and sectoral specialisation of local enterprises (LEs) and multinational enterprises (MNEs) in Ireland. Entropy indices are used as indicators of spatial and sectoral clustering in Irish manufacturing. Correlation coefficients are calculated to estimate the co-location patterns of LEs and MNEs, allowing an investigation of the overall impact of stated industrial and regional policy goals on the Irish manufacturing sector. The pattern of spatial changes found suggests that market forces were already driving enterprises out of more concentrated locations prior to the introduction of policies to promote greater spatial dispersion in the late 1990s. MNEs have become more sectorally specialised over the period, which is not surprising as policy is deliberately selective in attracting MNEs to key high tech manufacturing sectors. The less concentrated sectoral pattern amongst LEs enterprises is consistent with general restructuring in Irish manufacturing from lower- to higher-tech sectors, and the high sectoral correlation for high-tech MNEs and LEs suggests that LEs are following MNEs into the same sectors.

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Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp89.

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Date of creation: 15 Dec 2005
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Handle: RePEc:iis:dispap:iiisdp89

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Related research
Keywords: geographic concentration; sectoral specialisation; entropy indices; MNEs; LEs; public policy;

Find related papers by JEL classification:
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
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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  2. G Ottaviano & Diego Puga, 1997. "Agglomeration in a global Economy: A Survey," CEP Discussion Papers dp0356, Centre for Economic Performance, LSE. [Downloadable!]
  3. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June. [Downloadable!] (restricted)
  4. Karl Aiginger & Stephen W. Davies, 2004. "Industrial specialisation and geographic concentration: Two sides of the same coin? Not for the European Union," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 231-248, November. [Downloadable!]
  5. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-66, April. [Downloadable!] (restricted)
  6. Frances Ruane, 2003. "Foreign direct investment in Ireland," Working Papers 000056, Lancaster University Management School, Economics Department. [Downloadable!]
  7. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June. [Downloadable!] (restricted)
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  8. Krugman, P. & Venables, A.J., 1995. "Globalization and the Inequality of Nations," Research Institute of Industrial Economics Working Papers 430, Research Institute of Industrial Economics (IFN).
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  9. Holger Görg, Frances Ruane, 2001. "Multinational Companies and Linkages: Panel-Data Evidence for the Irish Electronics Sector," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 8(1), pages 1-18, February. [Downloadable!] (restricted)
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