Foreign Direct Investment in Ireland 2018

Source Publications: Foreign Direct Investment Annual 2018, National Income and Expenditure 2018

Get the data: StatBank BPA34, StatBank NQQ40

The OECD Benchmark Definition of Foreign Direct Investment (4^th Edition, BMD4) prescribes a number of indicators which indicate the level of globalisation in an economy. The following metrics allow for cross-country comparisons based on the relative importance of FDI: Inward FDI positions in reporting economies and inward FDI flows expressed as a percentage of gross domestic product (GDP) at current prices (Figures 1.2 and 1.3). As these measures focus on investment, they reveal the level of foreign ownership that exists in an economy.

Get the data: OECD Statistics

As illustrated in Figure 1.2, Ireland is a highly globalised economy with foreign investors having a significant role in Irish business.

Get the data: OECD Statistics

Figure 1.3 shows inward FDI flows were negative in 2018, reversing a trend of positive inward FDI flows in previous years. This is highlighted in the Annual Foreign Direct Investment 2018 release. It was caused by a withdrawal of investment predominantly from the EU.

Figure 1.4 illustrates a distributional analysis of Foreign Direct Investment into Ireland. Firms are sorted by the size of their inward FDI investments and then grouped. As illustrated, the first group of 25 firms makes up 70% of Ireland’s inward FDI. This illustrates how highly concentrated inward FDI is given the number of firms that receive FDI investments in Ireland. 

Figure 1.1 shows that outward FDI positions are often higher than the FDI positions in Ireland. This is determined to a large extent by Redomiciled PLCs in Ireland. Figure 1.5 shows that these companies own more than half of outward FDI positions. For confidentiality purposes data in 2015, 2016, 2017 is suppressed. 

Source Publications: Foreign Direct Investment Annual 2018

The direct investment figures depicted on this publication's infographic were presented according to the location of the ultimate controlling parent (UCP) to conceptually align FDI statistics with the employment and wage statistics. The FDI positions of the top ultimate investing countries are offered in Figure 1.6. As illustrated in Figure 1.6, the United States is the largest investor in Ireland, accounting for over €600bn in inward FDI positions.

In Figure 1.7, the change in investment between 2012 and 2018 by region is shown. Investment coming from Asia into Ireland has increased the most, while investment from all other regions has also increased.

As illustrated in Figures 1.2 and 1.3, Ireland is a highly globalised economy with a significant amount of foreign investment, so where does this investment go when it arrives in Ireland? Using Census data from 2016, we have been able to indicate the location of FDI employment by county, as illustrated in Figure 1.8 (with further analysis available in our Regional FDI Employment chapter). The data relies on a county variable that is extracted from address information on the pseudonymised Census data set (explained further in the background notes). In 2016, we can see that the counties with the largest share of FDI employment in Ireland were Dublin and Cork; the two of these counties account for approximately 50% of all the FDI employment in Ireland. Dublin, however, is by far the main beneficiary with respect to employment with 38% of all FDI employees in Ireland located in the capital.