Foreign Direct Investment in Ireland 2024

In this chapter, we look at estimating the distribution of foreign direct investment (FDI) inward stocks across Ireland by local authority area. In last year’s publication, the approach taken was based on data from the Business Register, from which it used the addresses of FDI companies to estimate the distribution of FDI stocks across regions in the country. This presented data for the amount of FDI stocks attributed to each company as a proxy for the distribution of FDI. In this year’s publication, we are using a different approach in which the addresses of the employees of foreign-controlled companies (FCC) are used as a proxy for the distribution of inward FDI stocks, instead of the addresses of the companies. While FCC and FDI companies are conceptually different, they are in practice the same in the case of Ireland. The analysis was done by data matching the Census 2022 with the Business Register 2024 and Revenue earnings data 2024 to produce a distribution of the addresses of the employees of FDI companies. This distribution was then used to apportion the FDI inward stocks across the local authority areas.

The analysis presents inward FDI stocks by local authority area, as well as the number and average earnings of full-time equivalent (FTE) employees of FDI companies by local authority area. In last year’s analysis, the highly concentrated distribution of FDI in Ireland among a small number of very large firms and confidentiality controls limited the level of granularity that it was possible to publish. This year’s method avoided such limitations through its use of anonymised and highly aggregated census data and by apportioning the FDI data. It was therefore possible to publish the results of the analysis at a greater level of granularity while avoiding statistical disclosure.

The focus of this approach on inward FDI stocks only is due to the highly volatile and concentrated nature of inward FDI transactions and income as well as the nature of outward FDI in Ireland which is dominated by a highly concentrated group of redomiciled PLCs.

Map 1 presents the distribution of inward FDI stocks by local authority area. It can be seen that there is a concentration of inward FDI stocks around the urban centres of Dublin and Cork. In last year’s publication, it was highlighted that there may be an overestimation for large urban areas and an underestimation for other areas as employer addresses were used and FDI stocks are typically associated with head offices located in urban centres. In this year’s analysis, these effects are not present since the employee addresses were used instead of the employer addresses. There is, however, an opposite effect by which employees may live in a neighbouring area to the area of their employment resulting in the apportioning of the inward FDI stocks to the neighbouring area the employee commutes from instead of where the employment is located. This can be seen clearly around Dublin and Cork in the map above.

Map 2 presents the distribution of the average earnings of FTE employees of FDI companies by local authority area. It can be seen that there are higher average earnings around the same urban centres seen in the analysis thus far, in addition to areas in the West.