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Surviving the crisis: Foreign multinationals vs domestic firms in Ireland

Author

Listed:
  • Godart, Olivier
  • Görg, Holger
  • Hanley, Aoife

Abstract

Starting from the observation that all firms in Ireland (foreign and domestic in manufacturing and services industries) were hit by the crisis, the paper asks whether there is a difference in the behaviour of foreign and domestic firms. One hypothesis is that foreign multinationals are less linked into the Irish economy, so more likely to leave once the economy is hit by a negative shock. The paper discusses background hypotheses before giving empirical evidence from firstly aggregate data, and secondly firm-level observations. The analysis of the latter suggests that foreign firms are not more likely to leave during the crisis than Irish firms. Some policy conclusions are offered in the paper.

Suggested Citation

  • Godart, Olivier & Görg, Holger & Hanley, Aoife, 2011. "Surviving the crisis: Foreign multinationals vs domestic firms in Ireland," CEPR Discussion Papers 8596, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8596
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    References listed on IDEAS

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    1. Barry, Frank & Bradley, John, 1997. "FDI and Trade: The Irish Host-Country Experience," Economic Journal, Royal Economic Society, vol. 107(445), pages 1798-1811, November.
    2. Dunne, Paul & Hughes, Alan, 1994. "Age, Size, Growth and Survival: UK Companies in the 1980s," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 115-140, June.
    3. Frances Ruane & Ali Ugur, 2005. "Labour Productivity and Foreign Direct Investment in Irish Manufacturing Industry - A Decomposition Analysis," The Economic and Social Review, Economic and Social Studies, vol. 36(1), pages 19-43.
    4. Laura Alfaro & Andrés Rodriguez-Clare, 2004. "Multinationals and Linkages: An Empirical Investigation," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Spring 20), pages 113-169, January.
    5. Robert E. Baldwin & Robert E. Lipsey & J. David Richards, 1998. "Geography and Ownership as Bases for Economic Accounting," NBER Books, National Bureau of Economic Research, Inc, number bald98-1, July.
    6. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    7. Dixit, Avinash K, 1989. "Entry and Exit Decisions under Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 620-638, June.
    8. Agarwal, Rajshree & Audretsch, David B, 2001. "Does Entry Size Matter? The Impact of the Life Cycle and Technology on Firm Survival," Journal of Industrial Economics, Wiley Blackwell, vol. 49(1), pages 21-43, March.
    9. Robert E. Baldwin & Robert E. Lipsey & J. David Richardson, 1998. "Introduction to "Geography and Ownership as Bases for Economic Accounting"," NBER Chapters,in: Geography and Ownership as Bases for Economic Accounting, pages 1-8 National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Dr. Albert Makochekanwa, 2017. "An Analysis of Factors that Determine firm Survival during Economic Crises: The Case of Zimbabwe Manufacturing Firms," Research Papers RP_332, African Economic Research Consortium.
    2. Lo Turco, Alessia & Maggioni, Daniela, 2014. "The micro evolution of trade and turnover in Turkey under the global crisis," Economic Systems, Elsevier, vol. 38(3), pages 397-414.
    3. Adalgiso Amendola & Anna Maria Ferragina & Rosanna Pittiglio & Filippo Reganati, 2012. "Are exporters and multinational firms more resilient over a crisis? First evidence for manufacturing enterprises in Italy," Economics Bulletin, AccessEcon, vol. 32(3), pages 1914-1926.
    4. Joachim Wagner & John Philipp Weche Gelübcke, 2012. "Foreign Ownership and Firm Survival: First Evidence for Enterprises in Germany," International Economics, CEPII research center, issue 132, pages 117-139.
    5. FERRAGINA, Anna Maria, 2013. "The Impact of FDI on Firm Survival and Employment: A Comparative Analysis for Turkey and Italy," CELPE Discussion Papers 127, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
    6. Antonios Georgopoulos & Dionysios-Antonios Lalountas & Ioannis-Dionysios Salavrakos, 2014. "Foreign versus Domestic Survival in a Changing Environment," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 21(2), pages 209-229, July.
    7. repec:esr:wpaper:rn2012/4/3 is not listed on IDEAS
    8. Morgenroth, Edgar, 2013. "The Regional Dimension of the Unemployment Crisis," Research Notes RN2012/4/3, Economic and Social Research Institute (ESRI).
    9. Vergara, Sebastián, 2013. "The performance of transnational corporations: Evidence for the manufacturing industry in Chile," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    10. Mohammad Jamali & Hatra Voghouei & Nor Md Nor, 2014. "Information technology and survival of firms," Netnomics, Springer, vol. 15(2), pages 107-119, September.

    More about this item

    Keywords

    financial crisis; firm survival;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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