A Copenhagen Economics study on the effects of outward direct investment (ODI) in Ireland has been released by Forfás – Ireland’s national board responsible for providing policy advice to the Government. Since the early 2000s, Irish companies had been increasingly investing abroad, so that the country for the first time became a net outward investor in 2004. As ODI by Irish companies is likely to continue, the conclusions of our study facilitate the development of policy to support the positive trends at the national level, as well as to address the challenges at the regional level.
 
Copenhagen Economics has been asked to comprehensively assess the effects of ODI on the Irish economy. To this end, we estimated the macroeconomic effects ODI exerts on employment and productivity as well as skill distribution in Ireland. We put them in the context of the experiences several prominent Irish overseas companies have had with their investments overseas.
 
The highlight of the study is that ODI has significantly and positively affected the levels of employment, especially within high-value adding service activities, as well as contributed to measurable advances in productivity. These effects arised as Irish companies became more competitive, by acquiring opportunities and productive inputs in new markets. But our study also documented that the benefits of ODI may not always be equally distributed both geographically as well as among stakeholders. The amount of low skilled manufacturing workplaces in peripheral regions may in fact decline as Irish companies relocate such activities to other countries.
 
Read the Forfás Statement on Outward Direct Investment.
 
Read the full Copenhagen Economics report here.

For further information please contact Mr Marcin Winiarczyk or Mr Martin Hvidt Thelle.