Foreign Direct Investment and Ireland’s Tiger Economy Essay

693 Words Feb 21st, 2016 3 Pages
Foreign Direct Investment and Ireland’s Tiger Economy
In the economic history of Ireland there have been many changes due to different governments and different policies. The reasons behind the Ireland economic success are the good location of the country, because it’s like a bridge to the European union market for the American companies, low tax, in fact there is a tax rate of 12,5 % that is the lowest in the European Union, a multilingual labor force, that is very important for the multinational enterprise and the labor cost is cheaper than other nations with the same skilled workers like Switzerland and Netherlands and to conclude a very good system of transportation and logistics to move products toward major markets in Europe
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Moreover, it is also true that foreign firms determine growth and development in the host country, but at the same time they could export profits toward their home countries. Another problem could be represented by the high dependence on foreign resources that this strategy could determine. At the same time, by the foreign countries and firms point of view FDI create to the access to an international market, and though the increasing costs, firms could be able to service any market in the world and then, to have huge revenues. In addition, firms could place the production or segments of production in such a way to exploit wage differentials in different countries, having a significant reduction in costs.
Ireland has been able to take successful economic policies that have proved to be perfect for this country. To explain more clearly, Ireland was a country without its own industries and a corporate sector, it is a small country with about five million inhabitants, thus to compete with the other country needed to attract FDI to boost the economy and a right way was lowering taxes. In fact, many American companies that wanted to arrive to the European market settled their headquarters for the European market and settlements in Ireland. In my opinion

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