Strategic Development of Multinational Subsidiaries in Ireland

Abstract

Ireland’s economy is highly dependent on the activities of multinational subsidiaries. OECD (1991) data shows that over 45 per cent of manufacturing employment and almost two-thirds of manufacturing output is attributable to foreign-owned firms. These subsidiaries have been set up in Ireland in three basic time periods:

• Pre-1921: a small number of companies, including for example Guinness, pre-date the formation of the state in 1921.

• 1921–1960: a number, mostly of UK parentage, were set up to be located inside the trade barriers established by the Irish Government after the formation of the state.

• Since 1960: a large number of multinational subsidiaries have been established, many of which have been attracted by the range of incentives designed for mobile investment and actively marketed by the Irish Industrial Development Authority (IDA).

An IDA (1994) survey found that there were almost 1100 foreign-owned subsidiaries in manufacturing or IDA-supported international services. Ownership of these subsidiaries was spread across 29 different countries, but parent companies from three home countries — the USA, the UK and Germany — owned almost 70 per cent of the subsidiaries.