Ireland's Foreign Direct Investment Competitive Advantage and Japanese Outward Foreign Direct Investment

Abstract

This article addresses Ireland's record in attracting foreign direct investment (FDI). FDI has been identified as one of the key factors that has spurred the growth of the Celtic Tiger. An adaptation of Porter's Diamond is offered to explain the determinants of Ireland's competitive advantage in attracting FDI. The overall trends in FDI inflows to Ireland are considered. The study then focuses on Japanese FDI into Europe and Ireland in particular. The pattern of Japanese FDI flows into Ireland is analysed in the context of Ireland's determinants of FDI competitive advantage. Future considerations around Ireland's model of competitive advantage are addressed.

Keywords:

• Japanese foreign direct investment
• Ireland model of FDI competitive advantages

Notes

¹ See, ‘The World in 2005’. Available at http://www.economist.com

² See The Irish Times, 17 Sep. 2004.

³ See The Economist, 14 Oct. 2004.

⁴ Ireland has a very young population with approximately 37 per cent under age of 25 and 21 per cent under the age of 15 (Central Statistic Office Ireland, 2006).

⁵ The Irish Congress of Trade Unions, the Federation of Irish Employers, the Construction Industry Federation and farming organizations.

⁶ For information on the highest proportion of young people, see Eurostat, the EU statistics office, population and social conditions, found at http://epp.eurostat.ec.europa.eu/portal/page?_pageid = 1996,45323734&_dad = portal&_schenia = PORTAL&screen = welcomeref&open = /&product = Yearlies_new_population&depth = 3

⁷ Market factors: access to land, access to financing, costs of financing, skills and education of workforce. Infrastructure: telecommunication, electricity, transportation, anti-competitive or informal practices. Government services: tax rates, tax administration, customs and trade regulations, labour regulations, business licensing and operating permits. Stability and crime: economic and regulatory policy uncertainty, macroeconomic stability, corruption, crime and legal system. See World Bank (2005) Investment Climate Survey 2000–2003. Survey Conducted by the World Bank Group, Information is obtained at: http://www1.worldbank.org/rped/index.asp?page = links

⁸ Index based on population distribution and industrial location analysis.