Factors Influencing Decisions by Multi-National Companies in Establishing Research and Development Facilities in Ireland

Abstract

Multi-National Companies (MNCs) seek to optimise their return on overseas investment by applying stringent techniques for assessing the suitability of new markets. The growth over the last decade in global foreign direct investment (FDI), points to an increasing need by MNCs to find appropriate overseas locations to serve fragmented local markets and to be closer to key customers. The scope of this research is to conduct an exploratory investigation into the factors that specifically influenced decisions by MNCs to invest in Research and Development (R&D) facilities in Ireland. In order to focus the research, a decision was made to explore this question as it relates to the technology sector. The investigative methodologies employed saw the application of both primary and secondary research. An initial review of the relevant literature focused on FDI in the global and Irish contexts. Primary research, in the form of in-depth interviews, was undertaken with existing MNCs in Ireland and a number of key stakeholders from policy makers to academia, whilst a focus group was conducted within IDA Ireland. The results of the research indicate that whilst Ireland has been extremely successful in attracting manufacturing and service-related activity, it has not done as well in securing large scale R&D investment. Equally, the factors that conspired to attract existing R&D investment in Ireland do not follow the more traditional and expected investment requirements matrix as applied by MNCs in seeking new investment locations.