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Do Domestic Firms Benefit from Foreign Presence and Import Competition in Irish Services Sectors?


  • Stefanie A. Haller


type="main" xml:id="twec12120-abs-0001"> This paper examines whether domestic firms benefit from the pro-competitive effects of imports from abroad and from the presence of foreign-owned firms in the host country in three Irish market-services sectors between 2001 and 2007. Grouping the three sectors together masks opposing effects in individual sectors. Where significant, the effect of foreign presence on domestic firms tends to be negative, this is mainly the case in wholesale and retail trade. Despite it being of lesser importance than foreign presence in these sectors, import competition from abroad is negatively associated with domestic firms' productivity in wholesale and retail trade, but positively in transport, storage and communication. There is no significant effect of foreign presence or import competition in real estate, rental and business activities. Using capital-labour ratios as an input-based indicator related to productivity suggests that domestic firms adapt to increased foreign competition by adjusting their inputs.

Suggested Citation

  • Stefanie A. Haller, 2014. "Do Domestic Firms Benefit from Foreign Presence and Import Competition in Irish Services Sectors?," The World Economy, Wiley Blackwell, vol. 37(2), pages 219-243, February.
  • Handle: RePEc:bla:worlde:v:37:y:2014:i:2:p:219-243

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    Cited by:

    1. Di Ubaldo, Mattia & Lawless, Martina & Siedschlag, Iulia, 2018. "Productivity spillovers from multinational activity to indigenous firms in Ireland," Papers WP587, Economic and Social Research Institute (ESRI).
    2. Liu, Yi & Li, Xue & Lahiri, Sajal, 2016. "Determinants of privatization in China: The role of the presence of foreign firms," China Economic Review, Elsevier, vol. 41(C), pages 196-221.

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