Abstract
This project employs the concept of embeddedness to analyze the connections between internationally-traded services multinationals and Ireland. Once located on the margins of the world economy, Ireland became Europe's fastest growing economy during the 1990s. While initially attracting little more than manufacturing branch plant investments, Ireland is now a more services-oriented economy. This shift followed a government strategy of targeting services investment in an effort generate employment and spur economic development. FDI in high growth internationally-traded services, like software and financial services, now occupies a much more significant component of Ireland's FDI profile. The success of this sector as well as its attachment to place is viewed as a critical factor for Ireland's continued economic growth.This dissertation examines how embedded software and financial services firms are in Ireland. The concept of embeddedness commonly refers to the level of connectivity between firms and localities. While incorporating aspects from a variety of approaches, the theoretical framework used in this study draws primarily from the political economy approach. Consequently, this study considers factors such as local linkage patterns, affiliate evolution and the consequences of Ireland's environment of rapid growth for firm embeddedness. The empirical analysis is based on data collected from published data sources, postal questionnaires and interviews.This research shows that FDI in internationally-traded services marks a significant break from previous waves of inward investment in Ireland. This is particularly true for software MNCs which are becoming increasingly embedded in Ireland, and will continue to act as a catalyst for future development. Conversely, financial services MNCs are more weakly embedded and in some ways resemble the branch plants common to earlier waves of FDI in Ireland. The research findings are important to policy-makers, especially those in other small, open economies in the English speaking world.This study contributes to the economic geography literature by researching empirically about the intersection of global capital flows with local territorial economies. It shows both the patterns of this investment and the processes driving its continued development. It also contributes to embeddedness studies by synthesizing and operationalizing the main aspects of each different approach, and in turn offering a new conceptualization of embeddedness.