Inward Investment, Firm Embeddedness and Place

This paper examines the embeddedness of multinational software firms located in the Republic of Ireland. Over the past 15 years, Ireland has emerged as a software centre of growing importance. Many leading US companies now use Ireland as a platform from which to service the European market, in turn making Ireland the world’s leading software exporter. As a result, the extent to which software multinationals become embedded within Ireland will affect future economic development. Although subject to several interpretations, the conceptualization of embeddedness offered in this paper incorporates traditional concerns with local linkages between multinational corporations and host regions as well as issues of growing interest such as affiliate evolution and expansion. In addition, it considers the wider business environment’s influence on firm embeddedness. The findings are based on published data and corporate and government interviews conducted during field research in Ireland. The paper finds that over time software multinationals are becoming somewhat more embedded within Ireland, but several issues related to the negative externalities of Dublin’s rapid growth potentially hinder future development.