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IDA Ireland has been successful in attracting investment in the form of multinational companies (MNCs) to Ireland - Leaving Cert Economics - Question c - 2012
Question c
IDA Ireland has been successful in attracting investment in the form of multinational companies (MNCs) to Ireland. (i) Name two MNCs in Ireland. (ii) State and exp... show full transcript
Worked Solution & Example Answer:IDA Ireland has been successful in attracting investment in the form of multinational companies (MNCs) to Ireland - Leaving Cert Economics - Question c - 2012
Step 1
Step 2
State and explain two reasons why MNCs are attracted to Ireland.
Answer
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Availability of educated workforce: Ireland boasts a highly educated workforce, which is crucial for MNCs that require skilled employees. This access to talent allows firms to operate efficiently and innovate, enhancing their competitive edge.
- Low rates of taxation: The corporate tax rate in Ireland is one of the lowest in the European Union, which is an attractive incentive for MNCs. This means that businesses can retain a larger portion of their profits, facilitating reinvestment and growth.
Step 3
Discuss two economic advantages to the Irish economy of MNCs locating here.
Answer
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Employment should increase: As MNCs establish operations within Ireland, they create job opportunities not just within their own firms but also in ancillary services. This contributes to a lower unemployment rate, fostering economic stability and growth.
- Taxation revenue will increase: The presence of MNCs contributes to higher taxation revenues for the government. Increased employment leads to higher personal income tax contributions, and the corporations also contribute through corporate taxes, strengthening public services and infrastructure.