The spatiality of Irish manufacturing linkages in the ‘Celtic Tiger’ era

Abstract

Manufacturing investment from abroad has been of immense importance to Ireland's economic development in recent decades. In particular, high levels of foreign investment in manufacturing were the main contributor to the unprecedented economic growth rates from the early 1990s which led to Ireland's economy being compared with the Asian ‘Tigers’. Clearly it is desirable from a national economic point of view that the current base of foreign manufacturing firms should remain as embedded as possible. In this respect, the low level of local linkages developed by foreign firms has been a constant concern for policy-makers. A number of studies have been conducted on the nature of linkages developed within the Irish economy by foreign-owned manufacturing plants in terms of the nature of these linkages and their potential for further development. However, there has been little research on the spatial patterns of external linkages of the plants in question. Based on a survey of 91 firms in four key manufacturing sectors, this paper examines the spatial configuration of the material input linkages of Irish manufacturing industry. The findings show that major sectoral variations exist in the spatiality of the linkage structures of Irish manufacturing industry. The paper concludes with a discussion of the possible implications of these variations for the future stability and embeddedness of manufacturing firms in the Irish economy.

Keywords:

• spatial linkages
• Ireland
• ‘Celtic Tiger’
• manufacturing industry

Acknowledgements

This research was funded by the Enterprise Ireland Millennium Scholarship Scheme and the National Institute for Regional and Spatial Analysis (NIRSA) Doctoral Fellowship scheme.

Notes

1. Irish-based firms are firms that are located in Ireland and can be Irish- or foreign-owned.

2. The foreign and indigenous Food, Drink and Tobacco sectors and the indigenous-owned Non-Metallic Mineral Products sector, which source most of their inputs from within the Irish economy, were excluded on this basis.

3. It was originally intended to include the entire chemicals & pharmaceuticals sector (NACE Code 24) but due to a very low response from chemicals firms, the analysis was confined to pharmaceuticals.

4. Most of the electronics firms surveyed were from NACE codes 30 (Office Machinery & Computers) and 32 (Electronic Valves, Tubes and Components), but some were drawn from code 31 (Electrical Machinery & Apparatus). Accordingly, data for codes 30–32 combined are furnished below.

5. Medical devices refer to NACE code 3310 (Medical & Surgical Equipment and Orthopaedic Appliances). However, as this accounts for the great bulk of output and employment in code 33, and as some Census of Industrial Production is not given for code 3310, data are given for the entire sector below.

6. In order to make optimal use of the available information, some assumptions were applied in cases of unclear information: for example, where dual sources were reported for a particular input, the supply of that input was divided equally between these sources, and where two suppliers were reported for an input, but the proportion supplied by each was not given, the average proportion of that input supplied by first and second suppliers reported by the other firms in the sector was applied. Further information on these assumptions is available from the authors.