Determinants of firms' inputs sourcing choices: the role of institutional and regulatory factors. ESRI WP599, September 2018

Using the theoretical framework of global sourcing with firm heterogeneity, we examine determinants of inputs sourcing choices of manufacturing firms established in the EU countries. To this purpose, we combine information on the ownership structure and company accounts from the Orbis data set with input-output data from the World Input-Output Tables (WIOT) and with information on institutional and regulatory factors at country level provided by international organisations. Our research findings indicate that manufacturing firms that source inputs intra-firm via foreign direct investment (FDI) across EU countries are larger, more productive, more intensive in tangible and intangible capital and less intensive in skills than manufacturing firms that source inputs at arm’s length. The probability of integrating inputs by manufacturing firms across EU countries is positively linked with the strength of legal systems, flexibility of labour markets and negatively linked to corporate tax rates and financial development in host countries. Less efficient insolvency procedures are associated with a higher probability of sourcing inputs intra-firm via FDI relative to arm’s length sourcing. The probability of sourcing inputs via FDI is negatively linked to sectoral restrictions to FDI and positively linked to the impact of service regulations on downstream industries

The impact of investment in innovation on productivity: firm level evidence from Ireland. ESRI WP571, September 2017

This paper examines the relationship between investment in innovation and productivity across firms in Ireland. We estimate a structural model using information from three linked micro data sets over the period 2005-2012 and identify the relationships between investment in innovation, innovation outputs and productivity. Our results indicate that innovation is positively linked to productivity. This result holds for all types of innovation and for both R&D and non-R&D expenditures. The innovation-related productivity gains range from 16.2 per cent to 35.4 per cent. The strongest link between innovation and productivity is found for firms with R&D spending and with product innovation

Prescriptions on antiproton cross section data for precise theoretical antiproton flux predictions

After the breakthrough from the satellite-borne PAMELA detector, the flux of cosmic-ray (CR) antiprotons has been provided with unprecedented accuracy by AMS-02 on the International Space Station. Its data spans an energy range from below 1 GeV up to 400 GeV and most of the data points contain errors below the amazing level of 5%. The bulk of the antiproton flux is expected to be produced by the scatterings of CR protons and helium off interstellar hydrogen and helium atoms at rest. The modeling of these interactions, which requires the relevant production cross sections, induces an uncertainty in the determination of the antiproton source term that can even exceed the uncertainties in the CR $\bar{p}$ data itself. The aim of the present analysis is to determine the uncertainty required for $p+p\rightarrow \bar{p} + X$ cross section measurements such that the induced uncertainties on the $\bar{p}$ flux are at the same level. Our results are discussed both in the center-of-mass reference frame, suitable for collider experiments, and in the laboratory frame, as occurring in the Galaxy. We find that cross section data should be collected with accuracy better that few percent with proton beams from 10 GeV to 6 TeV and a pseudorapidity $\eta$ ranging from 2 to almost 8 or, alternatively, with $p_T$ from 0.04 to 2 GeV and $x_R$ from 0.02 to 0.7. Similar considerations hold for the $p$He production channel. The present collection of data is far from these requirements. Nevertheless, they could, in principle, be reached by fixed target experiments with beam energies in the reach of CERN accelerators.Comment: 15 pages, 13 figures, matches published versio

PRODUCTIVITY SPILLOVERS FROM MULTINATIONAL ACTIVITY TO LOCAL FIRMS IN IRELAND. OECD PRODUCTIVITY WORKING PAPERS No. 16, November 2018

As well as their direct effects on output and employment, the attraction of foreign direct investment is sometimes argued to provide further economic benefits through spillover effects that potentially increase the productivity performance of domestic firms. Empirical evidence on these indirect effects has however tended to be mixed. This paper uses Irish firm-level data on both manufacturing and services firms to re-examine and update evidence on intra-industry and intra-region spillovers and then extends the previous research by examining if spillovers are more likely to occur through supply chain linkages. In addition, we consider the heterogeneity of investors and allow the spillover effects to differ for foreign affiliates owned by EU and non-EU based parent companies. Finally, we examine the role of domestic firms’ absorptive capacity in conditioning the effects of spillovers from multinationals on their productivity. Overall, we find limited evidence or a negative link between the presence of foreign-owned firms and the productivity of domestic firms in the same industry or the same region. Examining forward and backward linkages through supply chains indicates that on average, selling to foreign-owned firms had a positive effect while buying from foreign owned firms had a negative effect on the average productivity of domestic firms. Finally, considering the absorptive capacity of domestic firms and allowing the spillover effects to differ depending on the origin of the parent companies, we find that the positive productivity spillovers come from supply chain linkages between domestic firms investing in R&D and foreign affiliates of multinationals with headquarters based outside the EU

Productivity spillovers from multinational activity to indigenous firms in Ireland. ESRI WP587, March 2018

As well as their direct effects on output and employment, the attraction of foreign direct investment is sometimes argued to provide further economic benefits through spillover effects that potentially increase the productivity performance of domestic firms. Empirical evidence on this has however tended to be mixed. This paper uses Irish firm-level data on both manufacturing and services firms to re-examine and update tests of intraindustry and intra-region spillovers and then extends the previous research by examining if spillovers are more likely to occur through supply chain linkages. We further test for the sensitivity of these vertical spillover effects to alternative supply chain measures. Overall, we find fairly limited evidence of a link between the presence of foreign-owned firms and the performance of domestic firms with considerable sensitivity of results to changes in specification. Important variation across sectors is identified, however, with more robust evidence of intra-industry spillovers on the productivity performance of firms in services. Examining forward and backward linkages through supply chains indicates some negative impacts from obtaining supplies from and supplying foreign-owned firms although these are mitigated for domestic firms which invest in R&D, which appears to increase the absorptive capacity of the firms to benefit from productivity spillovers