FDI's Contribution to Ireland's Economic Development and Success

Ireland is a really attractive country for those foreign companies that want to settle in it. It is a fact that Ireland offers a legal framework that is characterized by having one of the lowest Corporate Taxes in the European Union (12.5%). This is undoubtedly one of its greatest strengths; as companies like Apple decide to move to Irish territory for these great tax advantages mentioned; in addition to the geographical situation offered by Ireland (bridge for international expansion).

The benefits brought by FDI to China are apparent. Economy is influenced by FDI in a number of ways. FDI involves transfer knowledge in the host country, which will create an increase on the existing stock of knowledge through labor training, the transfer of skills, and the transferring of new managerial and organizational experience. Also, it can help local corporations to access to advanced technology by capital accumulation in host countries (Mello, 1999 and Mello, 1997). Furthermore, FDI may allow China to develop in technology and knowledge which are not readily available locally, as a consequent increase productivity growth through the economy (Jose, 2003).

FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)

Foreign direct investment (FDI) has played a huge part of the international economy influencing economic growth globally with a total of $1.2 trillion spending via it in 2014 (UNCTAD, 2015). Over the past five years from 2011 to 2016 the UK has seen its FDI increase by almost double to 2213 individual FDI projects, this being an increase of 11% from 2014/15 to 2015/16 (Department for International Trade, 2016). The UK also stands out as the clear leader in attracting this FDI into the UK taking a total of 20.9% of the market share of FDI in the European union (Ernst & Young LLP, 2016). FDI is becoming an influential power within the economic system for the UK. A current FDI project underway seeing the constructing of a new nuclear power

When a multinational invests in a host country, the scale of the investment (given the size of the firms) is likely to be significant. Indeed governments will often offer incentives to firms in the form of grants, subsidies and tax breaks to attract investment into their countries. This foreign direct investment (FDI) will have advantages and disadvantages for the host country.

The republic of Ireland lies to the East of England and Wales with an estimated population of about 4.5 million. Its well infrastructure in terms of communication and ICT, stable legal system, low corporate tax and other incentives have been put in place through the Industrial development Agency (IDA) have been attracting foreign investments. Ireland has most of the world's best financial firms and a young highly skilled and available labour force that can be utilized by the foreign investors.

There is no doubt that foreign direct investment (FDI) can do a lot of good for a country, for instance it can add to an economy’s productive capacity and import not just capital but technology, production skills and better management. Multinational Corporation (MNC) is a large corporation which produces or sells goods or services in various countries. MNCs often seek out developing countries in order to set up a branch of their corporation in that host country and they do this to seek out several benefits. One benefit is that the MNC can bring their product to a new market that may not have previously had it. Another reason to produce goods in a country that is not its home country is primarily because; in developing countries the MNC can

FDI is further defined as “a category of cross-border investment made by a resident in one economy (the direct investor) with the objective of establishing a lasting interest in an enterprise (the direct investment enterprise) that is resident in an economy other than that of the direct investor” (OECD, 2008, p. 17).

Foreign Direct Investment (FDI) improved from 6.5% of the world’s GDP in 1980 to 31.8% in 2006.

Analyzing various researches on the benefits of the FDI in different industry such as the manufacturing and service, it appears that the benefits vary significantly between the two. The main case for FDI (host country) is that it can positively affect the development of the host country because of the direct financing it supplies and the technology and management

The economy of Ireland has transformed in recent years from an agricultural focus to a modern knowledge economy, focusing on services and high-tech industries and dependent on trade, industry and investment. Since the mid 1990's, Ireland has experienced consistent growth rates of up to 10% per annum. This has been attributed to years of strong government planning through the implementation of five-year National Development Plans. These plans provided for large-scale investment in infrastructural projects and the focused development of Ireland as a base for multinational export-oriented companies. Ireland was transformed from one of the poorest countries in Western Europe to one of the wealthiest.

FDI has broadened its meaning into the acquisition of a lasting management interest in a firm outside the investing enterprise’s home country. For the reason above, it comes in different forms which include direct acquisition of foreign companies, construction of a factory in a foreign country and investment in joint ventures. Britton and Worthington (2009) described FDI as an important aspect of globalisation as well as the activities of multinational companies.

In the recent time, significant rise of outward foreign direct investment (FDI) was witnessed from developing countries like China and India. The Organisation for Economic Co-operation and Development (OECD) defines FDI as an investment that reflects the objective of establishing a lasting interest or long-term relationship by a resident enterprise in one economy (direct investor) in an enterprise (direct investment enterprise) that is resident in an economy other than that of the

Otepola, Ayorinde. 2002. FDI as a Factor of Economic Growth in Nigeria. Dakar, Senegal: African Institute for Economic Development and Planning (IDEP), May. Available on line rom idep@unidep.org, http//unidep.org.

The research questions of the paper can be explicitly written down as: what is the impact of FDI on Economic Growth in Developing countries? What are the other factors which affect Economic Growth in Developing countries? It is important to mention here that this research addresses developing countries and the external validity of this research to developed countries is not advocated. To