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An Analysis of the Economic and Non-economic Factors that Contribute to the Attraction of Foreign Direct Investment: A case Study in Ireland 1998-2018

Parada Morales, Adriana (2020) An Analysis of the Economic and Non-economic Factors that Contribute to the Attraction of Foreign Direct Investment: A case Study in Ireland 1998-2018. Masters thesis, Dublin, National College of Ireland.

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Abstract

Given the importance of Foreign Direct Investment (FDI) for Ireland’s economic growth, the aim of this dissertation is to assess the driving sources behind Ireland’s success of attracting inward investment and how the country has attracted and retained FDI over the years.

This paper examines different factors of foreign direct investment in Ireland. The factors being analysed have been divided into two categories: economic, and non economic determinants which include market size, labour costs, infrastructure, inflation, corporate tax rate, education and unemployment. The period analysed goes from 1998 to 2018 where secondary data has been used and collected from main sources including the Central Statistics Office of Ireland, the World Bank’s Development Indicators, The Office of the Revenue Commissioners, and the Organisation for Economic Co-operation and Development (OECD). By applying a multiple regression model, this study found some interesting and important results such as FDI inflows as a dependent variable negatively react to labour costs as there is enough evidence to suggest that there is an association between the variables. Moreover, when testing the Pearson’s correlation coefficient, unemployment rate showed an unexpected small but positive correlation with FDI inflows, while variables such as market size, corporate tax rate, inflation, infrastructure and education showed the expected correlation that the author had anticipated. However, other than labour costs, the variables did not show any statistical significance that links them with FDI inflows. Arguably, all of these results and findings contribute to the existing knowledge and offer important implications, particularly for Irish government and relevant organizations in their attraction and retention of inward FDI into Ireland.

Keywords: FDI inflows, determinants, Ireland, GDP, Infrastructure, Corporate Tax, Education, Unemployment, Labour costs.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HB Economic Theory > Business Cycles. Economic Fluctuations
H Social Sciences > HG Finance > Investment > Foreign Direct Investment
H Social Sciences > Economics > Macroeconomics
Divisions: School of Business > Master of Science in Finance
Depositing User: Dan English
Date Deposited: 16 Feb 2021 10:30
Last Modified: 16 Feb 2021 10:30
URI: http://norma.ncirl.ie/id/eprint/4769

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