The Impact of Multinational Entry on Domestic Market Structure and R&D

We model the impact of different modes of multinational entry on the choices of domestic firms. Focusing on the competitive effects of foreign presence in the host country we demonstrate that greenfield investment will increase competition only if it is not countered by anti-competitive reactions on the part of the domestic firms. Considering also cross-border mergers and acquisitions the model, thus, provides two alternative explanations for the increase in concentration ratios in industries with mostly horizontal foreign direct investment. Moreover, foreign presence is shown to raise total investment in the local industry at the cost of crowding out domestic R&D.greenfield investment, cross-border mergers and acquisitions, host-country effects, market

Productivity is higher among some service firms when broadband becomes available, but not all. ESRI Research Bulletin 2019/04

Using internet services over broadband connections may help some firms become more productive, generating more output from a given amount of labour and capital equipment. However, there is mixed evidence internationally about how large this benefit has been in practice and which types of firms are most likely to improve their productivity by using these technologies. In this research we examine the effects of broadband availability on the productivity of service sector firms. Some previous studies using region- or country-level data have reported large productivity effects of broadband on services, but it is hard for this type of study to prove that broadband is making firms more productive. For example, their results might partly be explained by factors that both make firms more productive and more likely to use broadband, rather than a causal link from one to the other. Studies using data on firms have tended to find little evidence that there are broad-based gains from this source.2 Our research tries to unpack the service sector to see whether there are identifiable groups of firms that register significant productivity gains after broadband becomes available to them. Knowing more about how large and focused these benefits are should help policymakers predict the likely effects of programmes to bring high-speed broadband to less well-served areas

Do Domestic Firms Benefit from Foreign Presence and Competition in Irish Services Sectors? ESRI WP395. July 2011

This paper examines whether domestic firms benefit from foreign competition through imports and from the presence of foreign-owned firms via spillovers in three Irish market-services sectors between 2001 and 2007. Import competition enhances the productivity of domestic firms in two out of three market-services sectors (transport and business activities). The effects from foreign presence are more varied. Foreign presence enhances the productivity of domestic firms in one sector (transport) when using standard output-based measures of productivity. After taking into account the degree of absorptive capacity of the domestic firms this spillover effect only accrues to domestic non-importers. Using input-based measures of productivity, the paper points to adverse effects of foreign presence as it is associated with lower capital-labour ratios and higher part-time-to-full-time employee ratios among domestic firms in wholesale and retail trade

Picking “lemons” or “cherries”? : domestic and foreign acquisitions in Norwegian manufacturing

We compare the performance in employment, wages and productivity for domestic plants acquired by new domestic and foreign owners. Prospective foreign owners pick large, high-wage, high-productivity plants, while new domestic owners choose average performers of above average size. Employment, labour productivity and total factor productivity decline in domestic acquisition targets before acquisitions, only wages recover afterwards. Employment, wages and labour productivity increase after foreign acquisitions. The sample selection introduced by long-term comparisons and a focus on unique events introduces a downward bias into the results for domestic acquisitions and an upward bias for the foreign acquisitions

Capital-Energy Substitution: Evidence from a Panel of Irish Manufacturing Firms. ESRI Research Bulletin 2014/3/3

Using firm-level data from the Irish Census of Industrial Production for the period from 1991-2009, we look at how Irish manufacturing firms adjust their input mix in response to changing energy prices. We find that an increase in the price of energy causes the demand for energy inputs to fall, while the demand for capital, material and labour inputs rises. This indicates that the other factors of production are substitutable with energy in the Irish manufacturing sector

Factor Input Substitution in Irish Manufacturing. ESRI WP475. January 2014

We use a translog cost function to model production in the Irish manufacturing sector over the period from 1991 to 2009. We estimate both own- and cross-price elasticities and Morishima elasticities of substitution between capital, labour, materials and energy. We find that capital and energy are substitutes in the production process. Across all firms we find that a 1% rise in the price of energy is associated with an increase of 0.1% in the demand for capital. The Morishima elasticities, which reflect the technological substitution potential, indicate that a 1% increase in the price of energy causes the capital/energy input ratio to increase by 1.58%. The demand for capital in larger, more energy-intensive, foreign-owned and export-oriented firms is less responsive to increases in energy prices. We also observe a sharp decline in firms’ responsiveness between the first half of the sample period (the 1990s) and second half (the 2000s)

Corporate Expenditure on Environmental Protection. ESRI WP347. June 2010

We examine the determinants of firm’s current environmental expenditure and firm’s capital investment in equipment for pollution control using a Heckman selection model. As regards current environmental expenditure, we find that larger, exporting firms and firms subject to the Integrated Pollution Prevention and Control directive are more likely to spend resources at all. Once the decision to commit resources has been taken, larger firms, firms that are foreign-owned, and firms that report low shares of water and refuse charges in turnover have higher absolute levels of environmental expenditure. With respect to investment in equipment for pollution control, we find that energy intensive and exporting firms are more likely to invest at all. Once the decision to invest has been taken, larger firms and firms that report high water and refuse charges invest more in equipment for pollution control. This suggests that the firms for whom environmental concerns are most costly in terms of production and image do most to address them

Broadband adoption and firm productivity: evidence from Irish manufacturing firms

We estimate the effects of adopting DSL broadband on firm productivity and productivity growth allowing for differing broadband speeds. We use a two-stage least squares estimator with geographical broadband availability as an instrument to address some potential endogeneity problems in a panel of Irish manufacturing firms. While more productive firms are on average more likely to be using DSL broadband, we find no statistically signicant effect of broadband adoption on firms' productivity (growth)

Factor Input Substitution in Irish Manufacturing. ESRI WP475. January 2014

We use a translog cost function to model production in the Irish manufacturing sector over the period from 1991 to 2009. We estimate both own- and cross-price elasticities and Morishima elasticities of substitution between capital, labour, materials and energy. We find that capital and energy are substitutes in the production process. Across all firms we find that a 1% rise in the price of energy is associated with an increase of 0.1% in the demand for capital. The Morishima elasticities, which reflect the technological substitution potential, indicate that a 1% increase in the price of energy causes the capital/energy input ratio to increase by 1.58%. The demand for capital in larger, more energy-intensive, foreign-owned and export-oriented firms is less responsive to increases in energy prices. We also observe a sharp decline in firms’ responsiveness between the first half of the sample period (the 1990s) and second half (the 2000s)

Broadband adoption and firm productivity: evidence from Irish manufacturing firms

We estimate the effects of adopting DSL broadband on firm productivity and productivity growth allowing for differing broadband speeds. We use a two-stage least squares estimator with geographical broadband availability as an instrument to address some potential endogeneity problems in a panel of Irish manufacturing firms. While more productive firms are on average more likely to be using DSL broadband, we find no statistically signicant effect of broadband adoption on firms' productivity (growth)