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Promoting Industrial Clusters: Evidence from Ireland

Anne Marie Gleeson, Frances Ruane and Julie Sutherland

This paper analyses the spatial concentration and sectoral specialisation of local enterprises (LEs) and multinational enterprises (MNEs) in Ireland. Entropy indices are used as indicators of spatial and sectoral clustering in Irish manufacturing. Correlation coefficients are calculated to estimate the co-location patterns of LEs and MNEs, allowing an investigation of the overall impact of stated industrial and regional policy goals on the Irish manufacturing sector. The pattern of spatial changes found suggests that market forces were already driving enterprises out of more concentrated locations prior to the introduction of policies to promote greater spatial dispersion in the late 1990s. MNEs have become more sectorally specialised over the period, which is not surprising as policy is deliberately selective in attracting MNEs to key high tech manufacturing sectors. The less concentrated sectoral pattern amongst LEs enterprises is consistent with general restructuring in Irish manufacturing from lower- to higher-tech sectors, and the high sectoral correlation for high-tech MNEs and LEs suggests that LEs are following MNEs into the same sectors. Keywords: geographic concentration, sectoral specialisation, entropy indices, MNEs, LEs, public policy

JEL classifications: L60, R12, R58

Last updated 28 August 2014 by IIIS (Email).