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Promoting Industrial Clusters: Evidence from Ireland

Author

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  • Frances Ruane
  • Anne Marie Gleeson
  • Julie Sutherland

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.

Suggested Citation

  • Frances Ruane & Anne Marie Gleeson & Julie Sutherland, 2005. "Promoting Industrial Clusters: Evidence from Ireland," The Institute for International Integration Studies Discussion Paper Series iiisdp89, IIIS.
  • Handle: RePEc:iis:dispap:iiisdp89
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    File URL: http://www.tcd.ie/iiis/documents/discussion/pdfs/iiisdp89.pdf
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    References listed on IDEAS

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    1. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 857-880.
    2. Holger Gorg & Frances Ruane, 2001. "Multinational Companies and Linkages: Panel-Data Evidence for the Irish Electronics Sector," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 1-18.
    3. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, March.
    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. 7, pages 231-248, November.
    5. 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.
    6. 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 630-640, June.
    7. 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 253-266, April.
    8. G Ottaviano & Diego Puga, 1997. "Agglomeration in a global Economy: A Survey," CEP Discussion Papers dp0356, Centre for Economic Performance, LSE.
    9. Davies, Stephen & Lyons, Bruce, 1996. "Industrial Organization in the European Union: Structure, Strategy, and the Competitive Mechanism," OUP Catalogue, Oxford University Press, number 9780198289739.
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    Cited by:

    1. David Bailey & Helena Lenihan & Ajit Singh, 2009. "Lessons for African Economies from Irish and East Asian Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 9(4), pages 357-382, December.
    2. David Bailey & Alex De Ruyter & Noel Kavanagh, 2007. "Lisbon, Sapir and Industrial Policy: Evaluating the 'Irish Success Story'," International Review of Applied Economics, Taylor & Francis Journals, vol. 21(3), pages 453-467.

    More about this item

    Keywords

    geographic concentration; sectoral specialisation; entropy indices; MNEs; LEs; public policy;

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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