Technology and Foreign Direct Investment in Ireland
Two routes by which foreign multinational enterprises (MNEs) may transfer technology - direct R&D undertaken in Ireland or through the transfer of the fruits of R&D work undertaken by the parent firm - are examined. Direct R&D undertaken by MNEs in Ireland now accounts for two-thirds of all R&D in Ireland but does not appear to differ significantly, in terms of application or orientation, from the R&D work undertaken by Irish-owned industry. Using US tax rules on the allocation of parent firm R&D expenditures between the parent firm and the host firm, technology transfer from US parent firms is estimated. It is found that incorporating technology transfer from parent firms doubles the level of R&D expenditure attributable to US firms for use in Ireland.
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National Bureau of Economic Research, Inc.
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