INTRODUCTION

During the 1970s the Irish manufacturing sector has been coming increasingly under overseas control and ownership, primarily through the process of branch plant formation, to reach a level of 34.3% of employment by 1981. Although overseas companies have bestowed a wide range of benefits upon the Irish economy (and it is not argued that efforts to attract more should be re-directed), it nevertheless remains a key strand of Irish industrial strategy to stimulate and expand the indigenous industrial base. Between 1973–81 a total of 2,047 new industrial plants were opened throughout Ireland and survived until the end of the period (for definitions, see Appendix 1). These openings comprise 407 multinational branches (MNEs) providing 32,365 jobs by 1981; 158 new subsidiaries of Irish multiplant firms (IMPs) with 7,197 jobs; and 1,482 new indigenous single plant firms (ISPs) employing 18,032. This paper focuses upon the indigenous new firm formation process and presents evidence on temporal trends in formation rates, spatial variations at regional and county level and inter-industry differences; an attempt is also made to analyse new firm formation rates both sectorally and spatially within a multivariate framework in order to identify some of the factors underlying variations in entry. Finally, policy implications of the results are discussed.

DATA

The analysis is based upon the Industrial Development Authority's (IDA) annual employment survey conducted on January 1st each year. The survey constitutes a population census of manufacturing establishments with a minimum payroll of three including owner manager(s).