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Linkages between Multinationals and Indigenous Firms: Evidence for the Electronics Sector in Ireland

  • Holger Görg
  • Frances Ruane

This paper analyses the concept of linkages and studies the development and the determinants of inter-firm linkages between electronics firms in Ireland and domestic sub-suppliers using firm level data for 1982 to 1995. We discuss the concept of inter-firm linkages and the effects of linkages. We argue that the concept of linkages developed by Hirschman (1958) is an inter-sectoral concept which can arise as a result of underlying inter-firm linkages. Our empirical analysis indicates that foreign-owned electronic firms in Ireland source, on average, 24 per cent of their inputs in Ireland, which compares favourably with an estimate for foreign firms in Scottish electronics industries. In an econometric estimation, using panel data techniques, we find that firms in the Irish electronics sector increase their backward linkages over time; that foreign firms have lower linkages than Irish-owned firms; and that large and expanding firms have lower linkages than other firms.

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Paper provided by Trinity College Dublin, Department of Economics in its series Economics Technical Papers with number 9813.

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Date of creation: 1998
Date of revision:
Handle: RePEc:tcd:tcduet:9813
Contact details of provider: Postal: Trinity College, Dublin 2
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  1. P N O'Farrell & B O'Loughlin, 1981. "New industry input linkages in Ireland: an econometric analysis," Environment and Planning A, Pion Ltd, London, vol. 13(3), pages 285-308, March.
  2. Richardson, Martin, 1993. "Content Protection with Foreign Capital," Oxford Economic Papers, Oxford University Press, vol. 45(1), pages 103-17, January.
  3. Venables, Anthony J, 1993. "Equilibrium Locations of Vertically Linked Industries," CEPR Discussion Papers 802, C.E.P.R. Discussion Papers.
  4. Rodriguez-Clare, Andres, 1996. "Multinationals, Linkages, and Economic Development," American Economic Review, American Economic Association, vol. 86(4), pages 852-73, September.
  5. Leddin, A & Walsh, B, 1997. "Economic Stabilisation, Recovery, and Growth : Ireland 1979-1996," Papers 97/08, College Dublin, Department of Political Economy-.
  6. Anthony J. Leddin & Brendan M. Walsh, 1997. "Economic stabilisation, recovery, and growth : Ireland 1979-1996," Working Papers 199708, School of Economics, University College Dublin.
  7. repec:tpr:qjecon:v:110:y:1995:i:4:p:857-80 is not listed on IDEAS
  8. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," NBER Working Papers 5098, National Bureau of Economic Research, Inc.
  9. James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
  10. Carl Davidson & Steven J. Matusz & Mordechai E. Kreinin, 1985. "Analysis of Performance Standards for Direct Foreign Investments," Canadian Journal of Economics, Canadian Economics Association, vol. 18(4), pages 876-90, November.
  11. P N O'Farrell & B O'Loughlin, 1981. "New Industry Input Linkages in Ireland: An Econometric Analysis," Environment and Planning A, , vol. 13(3), pages 285-308, March.
  12. repec:sae:niesru:v:160:y::i:1:p:76-86 is not listed on IDEAS
  13. Lall, Sanjaya, 1978. "Transnationals, Domestic Enterprises, and Industrial Structure in Host LDCs: A Survey," Oxford Economic Papers, Oxford University Press, vol. 30(2), pages 217-48, July.
  14. Lopez-de-Silanes, Florencio & Markusen, James R. & Rutherford, Thomas F., 1996. "Trade policy subtleties with multinational firms," European Economic Review, Elsevier, vol. 40(8), pages 1605-1627, November.
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