Thesis: Location Specific Determinants of Foreign Direct Investment - An exploratory study of Japanese investment in Ireland

  • 1,111 views
Uploaded on

A thesis researching Location Specific Determinants of Foreign Direct Investment of Japanese firms investing in Ireland. This thesis uses the Kano Model for the first time as a lens to examine FDI. …

A thesis researching Location Specific Determinants of Foreign Direct Investment of Japanese firms investing in Ireland. This thesis uses the Kano Model for the first time as a lens to examine FDI. Submitted to the National University of Ireland, Galway as part of my Masters in Technology Managment.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
1,111
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
32
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. i Location Specific Determinants of Foreign Direct Investment: An exploratory study of Japanese Investment in Ireland Ronan Patrick Coy, B. Eng. A Research Dissertation submitted in partial fulfilment for the Degree of Masters of Science in Technology Management of the National University of Ireland, Galway College of Business, Public Policy and Law School of Business & Economics Head of Department: Dr. Emer Mulligan Research Supervisor: Kathryn Cormican Submission: August 2012
  • 2. ii I hereby certify that this material, which I now submit for assessment on the programme of study leading to the award of Master of Science in Technology Management, is entirely my own work and has not been taken from the work of others save and to the extent that such work has been cited and acknowledged within the text of my work. Student ID Number 10101315 Name of Candidate Ronan Coy Signature of Candidate Date
  • 3. iii Acknowledgements I would like to thank Kathryn Cormican for her guidance as my supervisor, Dr Majella Giblin for her help and direction and to the respective lecturers on the MSc in Technology Management, for their support. My gratitude goes to all those who willingly participated in and devoted some of their valuable time to this research. Finally, I would like to thank my family for their support, understanding and baby-sitting duties. I particularly want to thank my wife Susan and my son James for their patience as I completed my studies.
  • 4. iv Table of Contents Acknowledgements............................................................................................iii Table of Tables ..................................................................................................vi Table of Figures.................................................................................................vi Abstract.............................................................................................................vii 1 Chapter One: Introduction.......................................................................... 1 1.1 Background to the Research ................................................................ 1 1.2 The Research Question ........................................................................ 3 1.2.1 Introduction................................................................................... 3 1.2.2 Research Questions....................................................................... 3 1.3 Significance of the Research................................................................ 4 1.4 Outline of the Thesis............................................................................ 7 2 Salient Features of Foreign Direct Investment ........................................... 8 2.1 Introduction.......................................................................................... 8 2.2 Literature on the Importance of Government Policy ........................... 8 2.2.1 Proactive Role of Government ..................................................... 8 2.2.2 Low corporate tax rates ................................................................ 9 2.2.3 Low-risk Political Environment ................................................. 10 2.2.4 High-Quality Government Institutions....................................... 11 2.2.5 Industrial Policies for Knowledge Clusters................................ 11 2.2.6 International Trade Agreements on FDI..................................... 11 2.3 Literature on the Importance of Economic Activity .......................... 12 2.3.1 Strong Macroeconomic Conditions............................................ 12 2.3.2 Access to Local Capital within a Stable Banking System.......... 13 2.3.3 Low Levels of Corruption and Risk ........................................... 13 2.3.4 Access to a Strong Export Market.............................................. 14 2.3.5 Growing Domestic and Regional Markets ................................. 15 2.3.6 Labour Force Costs and Productivity ......................................... 16 2.3.7 Access to High-skilled Labour ................................................... 16 2.3.8 Clusters and Agglomeration Effects........................................... 17 2.3.9 Low-cost operating environment & High Quality Infrastructure18 2.4 Literature on the Importance of Business Enablement ...................... 19 2.4.1 Access to Progressive Investment Promotion Incentives ........... 19 2.4.2 Access to Local Amenities and High Quality of Life................. 20 2.4.3 Previous Investment or Knowledge of Ireland ........................... 20 2.5 A Conceptual Framework for FDI Determinants .............................. 21 2.6 Conclusion ......................................................................................... 21 3 Research Methodology............................................................................. 22
  • 5. v 3.1 Introduction........................................................................................ 22 3.2 Research Design................................................................................. 22 3.2.1 Research Questions..................................................................... 22 3.2.2 Research Methods....................................................................... 23 3.3 The Research Project ......................................................................... 25 3.3.1 Selecting the Research Topic...................................................... 25 3.3.2 The Qualitative Research Phase ................................................. 25 3.3.3 The Quantitative Research Phase ............................................... 28 3.4 Limitations of Methods Used............................................................. 36 3.5 Conclusion ......................................................................................... 37 4 Findings and Discussion........................................................................... 38 4.1 Introduction........................................................................................ 38 4.2 Findings from Questionnaire ............................................................. 38 4.2.1 The Survey Sample..................................................................... 38 4.2.2 Demographic Data...................................................................... 39 4.2.3 Analysis using the Kano Model.................................................. 40 4.2.4 Survey results.............................................................................. 41 4.2.5 Prioritised Survey results............................................................ 42 4.2.6 Top 5 FDI Determinants............................................................. 45 4.2.7 Discussion on Questionnaire Findings ....................................... 46 4.3 Findings from Interviews................................................................... 51 4.3.1 Perceptions of Policy Determinants............................................ 51 4.3.2 Perceptions of Economic Determinants...................................... 56 4.3.3 Perceptions of Business Enablement Determinants ................... 61 4.3.4 Encouraging Further Japanese Investment ................................. 65 5 Conclusions .............................................................................................. 67 5.1 Introduction........................................................................................ 67 5.2 Secondary Research Questions.......................................................... 68 5.2.1 Secondary Research Question One............................................. 68 5.2.2 Secondary Research Question Two............................................ 71 5.3 Primary Research Question................................................................ 72 5.4 Limitations and Further Studies......................................................... 73 6 References................................................................................................. 74 7 Appendices ............................................................................................... 87 7.1 Appendix I Online Questionnaire ...................................................... 87 7.2 Appendix II: Interview Format .......................................................... 93
  • 6. vi Table of Tables Table 3-1: Semi-Structured Interview Themes ....................................................28 Table 3-3: Kano Response Choices (Kano, et al., 1984; ter Maat, 2011).....34 Table 3-4: Table of All Japanese Firms in Ireland included in survey .........35 Table 3-5: Table of other respondents included in Survey..............................35 Table 3-6: Kano Evaluation Table (Source (ter Maat, 2011; MacDonald, et al., 2006; Berger, et al., 1993)......................................................................................35 Table 4-2: Short Names for Topics addressed in Survey Questionnaire....40 Table 4-3: Kano Questionnaire Results (Group 2) ..............................................41 Table 4-4: Average Dysfunctional, Functional and “self-stated-importance” scores ....................................................................................................................................42 Table 4-5: Details of Interviews..................................................................................51 Table of Figures Figure 1-1: Sources of FDI in Ireland 2009. Source: (Department of Enterprise, Trade & Innovation, 2010, p. 15)...........................................................2 Figure 1-2: FDI in Ireland by Employment Numbers (IDA Ireland, 2012)...5 Figure 2-1: Conceptual Framework of FDI determinants ................................21 Figure 3-1: Mixed Method Research Design Framework .................................23 Figure 3-2: Details of Interviews................................................................................28 Figure 3-3: Focus of FDI research by various authors.......................................30 Figure 3-4: The Kano Model (Source adapted from (Yang, 2005)) ..............31 Figure 3-5: Description of Kano Categories (Adapted from (Berger, et al., 1993, pp. 3-5))...................................................................................................................32 Figure 4-1: Survey Sample and Response Rate ....................................................38 Figure 4-2: Summary of Demographic Data ..........................................................39 Figure 4-3: Kano Category Selection Calculation. Source (Berger, et al., 1993, p. 13).........................................................................................................................41 Figure 4-4: Kano Functional Dysfunctional Graph. Source (Berger, et al., 1993).....................................................................................................................................42 Figure 4-5: Constellations of Importance ...............................................................43 Figure 4-6: Results from Top 5 Ranking in Survey .............................................45 Figure 4-7: Top 5 FDI Determinants from Survey...............................................46 Figure 4-8: Role of Policy Determinants (Group 2) ............................................47 Figure 4-9: Economic Determinants of FDI............................................................48 Figure 4-10: Business Facilitation Determinants of FDI - Results ................49 Figure 4-11: Alignment of Policies with needs of Japanese MNCs................55 Figure 5-1: Top-Five FDI Factors ...............................................................................69 Figure 5-2: Constellation Factors for FDI................................................................70 Figure 5-3: Unique FDI Factors from Fujitsu Case Study..................................71
  • 7. vii Abstract Ireland has long been a prime location for foreign direct investment (FDI) by Multinational Corporations (MNCs) particularly from the US. The academic literature on FDI in Ireland is thus dominated by foreign investment from the US. With the redefinition of global economics and the increasing importance of Asian economies, there is a need to broaden Ireland’s attractiveness to other global investors. This paper conducts an exploratory investigation into the location-specific FDI factors that attract Japanese MNCs to Ireland. In the process, the study sought to understand the salient factors for investment by Japanese firms in terms of policy, economic and business facilitation determinants. The study also sought to discover how Ireland could increase its attractiveness to Japanese MNCs. Data was collected using mixed methods. A case study was conducted of an FDI investment in R&D collaboration by a Japanese MNC. This was complemented by an online questionnaire of existing Japanese MNCs in Ireland, which was designed and analysed using the Kano Model. The study indicates that many of the location-specific features that attract US MNCs to Ireland such as the low corporation tax and highly skilled workforce are equally attractive to Japanese MNCs. However, the risk-averse nature of the Japanese investor and the limited cultural links between Ireland and Japan means that new approaches must be taken to attract Japanese FDI. The results, interpreted through the Kano Model, highlight that interconnected clusters of FDI factors are viewed as important by Japanese investors when investing in Ireland.
  • 8. 1 1 Chapter One: Introduction This introductory chapter provides a brief overview of the problem definition, the case study under investigation, the research objectives and the gaps in the current literature. A short account of the remaining chapters in this paper is also provided. 1.1 Background to the Research Foreign Direct Investment (FDI) is essentially an international investment where the investor gains significant influence in the management of an entity outside the investor’s home country (Solomon, 2011; UNCTAD, 2006; OECD, 1996). In addition, the OECD guidelines state that FDI requires the foreign investor to own 10 per cent or more of the ordinary shares or voting power to fulfil the definition. By contrast, some countries treat the 10 per cent cut-off in a flexible manner and may declare other investment relationships as FDI (OECD, 1996). However, for the purposes of this paper foreign direct investment will be in line with the OECD definition as it allows for international comparability and potential generalizability of the research. Using this OECD definition of FDI, empirical evidence shows that FDI has become an important force in the internationalisation of investment activities in both the global and Irish economies alike. For instance, the inflows of FDI globally were $1,114 billion in 2009 (UNCTAD, 2010) while inflows into Ireland were $13.1 billion in 2011 (OECD, 2012). Furthermore, Ireland’s growth during the ‘Celtic Tiger’ was attributed partly to foreign direct investment (Barry, 1999; O'Connor, 2001; Ruane & Gorg, 2000) and the ability for Ireland to emerge from the current economic crisis will depend heavily on continued FDI by foreign multinationals (IDA Ireland, 2010). Given the economic importance of FDI for the Irish economy and its recovery in the future, it is critical that the determinants for FDI are understood. In the classic FDI literature, there have been many studies on the motivations underlying FDI engagement (Hymer, 1976; Grosse & Behrman, 1992; Kindleberger, 1969; Caves, 1971; Williamson, 1975), and the entry modes of the FDI strategy (Dunning, 1980; Grosse & Behrman, 1992), which highlight
  • 9. 2 the complex mix of socio-cultural, political, economic and business factors that influence FDI decisions. While these theories provide context for FDI they do little to explain why MNCs decide to invest in Ireland, a small open economy on the western fringes of Europe. Understanding these investment decisions is even more relevant given Ireland’s recent economic recession. Building on the early theories of FDI, many academics have focused on unearthing the reasons for MNCs investing in Ireland through FDI. However to date, much of academic literature and empirical evidence on the determinants of FDI in Ireland has focused on large US firms (Gunnigle & McGuire, 2001; Baibekova & Hoang, 2010; IDA Ireland, 2011). This may be explained by the prevalence of US firms in Ireland and the significance of their foreign investments. With the majority of Irish FDI being sourced in the US and Europe (See Figure 1-1) the investment from other areas (including Japan) is not significant (Department of Enterprise, Trade & Innovation, 2010). Figure 1-1: Sources of FDI in Ireland 2009. Source: (Department of Enterprise, Trade & Innovation, 2010, p. 15) While US firms have rightly received attention from academics studying the determinants and impact of FDI in Ireland, there are potential benefits from having a more diversified investment profile including a lower exposure to economic and currency fluctuations in MNCs home countries. One region that has received little attention in terms of FDI has been Japan. Although the Japanese may have quite a different culture to the Irish, their focus on high- technology activity couples well with Ireland’s recent focus on building the “Smart Economy” and developing the “Innovation Island” (Government of Ireland, 2008).
  • 10. 3 1.2 The Research Question 1.2.1 Introduction This research aims to provide an exploratory review of the investment climate for FDI by an established Japanese IT Services MNC in Ireland. The research in particular aims to provide a case study analysis of the context for choosing Ireland as a location for investment, by Japanese MNCs. This case study is further backed by a survey on Japanese MNCs in Ireland and their perception of FDI factors in Ireland. 1.2.2 Research Questions The aim of this paper is to address one primary research question: PQ 1. What are the location-specific factors that influenced the decision by Japanese MNCs to invest in Ireland? In addressing this primary research question, this paper seeks to answer the following two related questions: SQ 1. What are the perceptions of managers in Japanese MNCs as to the key factors in investing in Ireland: the role of policy determinants, economic determinants and business facilitation determinants? SQ 2. Given the perceived locational determinants for FDI in Ireland, what can Ireland do to encourage greater investment from Japan? These research questions will be examined using a case study of foreign direct investment by Fujitsu, a Japanese MNC in the Information and Communications Technology (ICT) sector in Ireland. The study will focus on the location-specific FDI determinants that led to Fujitsu selecting Ireland as the location for investment. A survey of Japanese MNCs in Ireland will also be used to provide comparability of results and generalizability for the study. These investment determinants of Japanese MNCs in Ireland are under- developed in the literature. However, this study will draw somewhat on the work of Rios-Morales & Brennan (2007) which studied the pattern of FDI flows from Japan into Europe and Ireland. Rios-Morales & Brennan’s (2007) study represents the most complete quantitative analysis of Ireland’s FDI features and the Japanese drivers for outward FDI.
  • 11. 4 1.3 Significance of the Research Since the establishment of the IDA in 1970, there has been an ever-increasing focus on and awareness of FDI in Ireland and its importance for jobs and growth in the economy (IDA Ireland, 2010). Given the recessionary economic climate, it is clear that FDI has become more important than ever for Ireland’s future. Much of the research on Ireland’s FDI success has taken place in during the ‘Celtic Tiger’ boom years in Ireland when the Irish experience of growth became a fascinating research topic (Barry & Bradley, 1997; Barry, 1999; Gunnigle & McGuire, 2001; O'Connor, 2001; O'Malley & O'Gorman, 2001; Rios-Morales & Brennan, 2007). Much of this research reviews the changes and growth of the Irish economy attributed to FDI over the past few decades when Ireland emerged from the recession of the 1970’s and 1980’s and then saw strong growth in the 1990’s and the ‘Celtic Tiger’ in the first seven years of the 2000’s. However, to the author’s knowledge, little research has occurred on FDI cases in the past five years. Although the economic boom is finished, FDI inflows into Ireland remain strong and Ireland is still ranked as a top location for FDI investment. For instance, Ireland is the number one investment destination country by average value of investment projects (IBM, 2011), second for productivity and efficiency and fourth for business legislation for FDI investors in the world (IMD, 2012). Although Ireland is clearly a leader in global FDI inflows, competition is increasing and as the economic climate continues to decline, the Irish competitive landscape is worsening. The IMD World Competitiveness Report for 2012 shows that poor public finances, growing unemployment and lack of infrastructure has weakened Ireland’s competitiveness. On the other hand, Ireland is still an attractive location for FDI as IDA Ireland and the Department of Jobs, Enterprise and Innovation report increasing numbers of investments won and new companies investing in Ireland for the first time over the past three years (IDA Ireland, 2010; Department of Jobs, Enterprise and Innovation, 2012). Clearly then Ireland is an attractive location for certain investors and understanding these investment patterns is crucial for future growth.
  • 12. 5 The MNCs that are attracted to invest in Ireland are primarily US firms as evidenced by Ireland’s FDI inflows and stock of FDI (IDA Ireland, 2012; CSO , 2011). In addition, the most significant FDI investments in Ireland in 2011 were all by US household names such Twitter, Intel, IBM, Coca-Cola, Pfizer, PayPal and others (Department of Jobs, Enterprise and Innovation, 2012). Moreover when examining the level of employment by Foreign firms in Ireland, it can be seen that 75% of jobs in foreign firms are within US MNCs with only 2% in Japanese MNCs (See Figure 1-2). Figure 1-2: FDI in Ireland by Employment Numbers (IDA Ireland, 2012) In its report, “Sharing Our Future: Ireland 2025”, Forfás point out that as FDI has become more competitive and there is a need to seek out: “ new and emerging markets and work with emerging global multi-national corporations (MNCs) to explore their future needs and the potential role for Ireland as a partner in their innovation processes and in serving global markets” (Forfás, 2009) This need to broaden FDI sources outside of US MNCs is also recognised by the Irish Government as it finds that having an overreliance on certain markets “increases our vulnerability to external shocks and currency fluctuations” (Department of Enterprise, Trade & Innovation, 2010, p. 7). Although Ireland’s trade strategy highlights the need to market the country as a base for FDI from Asia, there is little focus on the needs of MNCs from these markets. Canada 1% Sweden 1% Netherlands 2% Japan 2% Switzerland 2% France 3% United Kingdom 4% Germany 7% United States 74%
  • 13. 6 Thus, much of the literature on FDI in Ireland has focused on the reasons for these US firms investing in Ireland during the period of Ireland’s success story. However, during this same period, Japanese FDI into Europe experienced strong growth (Cieslik & Ryan, 2004; Rios-Morales & Brennan, 2007). The main driver for this investment was the enlargement of the EU, with much Japanese FDI focusing on market-seeking strategies in new EU accession states (Park, 2003). Japan had traditionally invested its FDI into the US but by 2000 Japanese FDI into Europe was double that of the US and five times that of the Asian regions. In Ireland, most FDI is focused on knowledge intensive sectors such as information and communication technologies, bio-medical, pharmaceutical and international financial services. This knowledge intensive sector is built around American MNCs who consider Ireland to be the most profitable location for FDI due to the low corporate tax rate and the highly trained workforce (Durkan, et al., 1999). Park (2003, p. 1739) points out that most FDI from Japan into developed countries has been knowledge intensive investment yet Ireland has only attracted a small percentage of this investment despite the apparent FDI alignment. Japanese FDI has been invested most heavily in the UK, France and Germany with smaller European countries such as Netherlands and Belgium also receiving more FDI than Ireland (Rios-Morales & Brennan, 2007). While Ireland has been generally successful in attracting inward investment, it has a much poorer record with Japanese FDI (Rios-Morales & Brennan, 2007). Ireland, in employment terms, is the most FDI-intensive economy in the EU (Barry & O'Mahony, 2006) and needs to build diversified sources of FDI to protect against home country issues affecting MNC investments in Ireland. This research seeks to uncover the reasons for Japanese MNCs investing in the knowledge-intensive sector in Ireland and draw some potential conclusions in terms of future investment from Japanese MNCs. Finally, the lessons from this Japanese investment experience may hold valuable insights in terms of Ireland attracting investment from other major Asian economies in future.
  • 14. 7 1.4 Outline of the Thesis The first chapter of this paper, this chapter, provides a brief overview of the thesis beginning with an outline of the background to FDI by MNCs in Ireland, the research questions being investigated and discusses the significance of the study, highlighting the lack of literature on Japanese FDI in Ireland. Chapter 2 reviews the current literature of FDI in Ireland, specifically focusing on salient location-specific determinants of FDI, particularly on Research and Development (R&D) projects. In identifying the locational factors for FDI by Japanese firms, this paper examines the literature on FDI by Japanese MNCs. The extant literature on the determinants of FDI in Ireland is also explored with a view to understanding the socio-cultural, political, economic and business aspects of those FDI factors. The next chapter describes the methodology employed in the research and the findings of the research are subsequently discussed. Finally, the determinants of FDI investment by Japanese MNCs in Ireland are identified based on the case study evidence and conclusions are drawn.
  • 15. 8 2 Salient Features of Foreign Direct Investment 2.1 Introduction This chapter aims to provide a review of the recent contributions to literature on foreign direct investment and the locational determinants of such investment. In attempting to comprehend the complex factors that affect the attractiveness of particular geographic locations it is essential that a brief assessment of the current literature is undertaken. With the growth in FDI over recent years, there has been a growing body of research on the topic as economists, academics and policymakers alike have sought to determine the national factors that influence economic growth (OECD, 2009; OECD, 2011; Porter, 2003). Although there is some consensus among scholars on the role of FDI in fostering economic growth (Lim, 2001; Blomstrom, 1986; Blomstrom, et al., 2000; Bîrsan, et al., 2008), there has however been limited consensus on FDI determinants (Singh & Jun, 1995, p. 4; Eicher, et al., 2011; Lim, 2001, p. 14; Artige & Nicolini, 2006, p. 5). Thus, such complexity and contrasts are evident in the literature review. 2.2 Literature on the Importance of Government Policy 2.2.1 Proactive Role of Government For countries to gain competitive advantage, evidence suggests that governments must play an active role in creating an environment that enhances that competitiveness (Lall, 2002). While governments worldwide have adopted more market-orientated policies, becoming more attractive locations for FDI, to grow their domestic economies (Blomstrom & Kokko, 2003), only a small number have been successful in attracting FDI (Addison & Hesmati, 2003). Rios-Morales & O'Donovan (2006) argue that governments require a holistic approach to reduce barriers to foreign investors and provide incentives alongside more long-term development goals. For Japanese firms in particular, Mody et al. (1998) find that government restrictions on foreign ownership are strongly resented by Japanese investors. Thus, it appears that holistic government policies are required to attract FDI and those countries with the
  • 16. 9 least onerous government restrictions will be most attractive to Japanese investors. 2.2.2 Low corporate tax rates The creation of government policies that deliver business-friendly fiscal and financial incentives has been shown to improve the competitive advantage of countries (Blomstrom, 2001). For Ireland, fiscal incentives such as low corporate tax and subsidies were central to attracting investment by MNCs since the 1950’s (Barry & Bradley, 1997). To this day, the corporate tax rate is seen as crucial to Ireland’s attractiveness for FDI but empirical findings are mixed. Sawkut et al. (2007) study of FDI determinants found host country taxation policies to be a significant determinant of FDI inflows and low tax countries attract greater proportions of FDI (UNCTAD, 2011; Eicher, et al., 2011, p. 18). In contrast, Wheeler and Mody’s (1992) study found that the corporate tax rate does not appear to play much of a role in attracting investors. Although empirical evidence is inconclusive, countries adopting FDI policies focus primarily on lowering of corporate tax rates (UNCTAD, 2011), thus it is generally expected to have a positive effect on FDI inflows. However, Blonigen (2005) points out that taxation effects on FDI are complex and highlights how Corporate Tax Rates and Tax Treaties influence FDI flows while Razin and Sadka (2007) emphasise the impact of double taxation treatment in the host and parent country. Eicher et al (2011, p. 11) find that increases in source country tax rates encourage MNCs to invest abroad but the volume of investment increases when the host country taxes are lowered. Although the number of bilateral tax treaties has increased (Egger, et al., 2006), the empirical evidence showing their positive effect on FDI is ambiguous (Eicher, et al., 2011). For Japanese firms, special home country tax breaks means that much of the profits from foreign affiliates is repatriated (UNCTAD, 2011) and may reduce the attractiveness of host country tax policies. The use of fiscal and financial incentives are not necessarily significant determinants of FDI but in certain cases government policy to staunchly hold corporate tax low may be viewed positively by investors (Reuber, et al., 1973) as is the case with Irelands stance on harmonised EU taxation policies.
  • 17. 10 2.2.3 Low-risk Political Environment As with any MNC decision, risk plays an important part in the decision to invest in a country. While many studies find that political risk is a deterrent to FDI (Singh & Jun, 1995; Blonigen, 2005; Mauro, 1997; Cieslik & Ryan, 2004), Wheeler and Mody (1992) found that although geo-political risk was significant, domestic socio-political risk is assigned little importance. Measures of risk for FDI include financial risk, political stability, inequality, corruption, red tape, quality of the legal system and cultural compatibility (Wheeler & Mody, 1992). The contrast in results may reflect the difficulty in measuring perceived risk and the differing proxy indicators used to determine risk levels (Lim, 2001, p. 16). Schneider and Frey (1985) found that political and social unrest in the host country had a negative effect of foreign investment inflows. They report that political instability and occurrences of disorder deters risk-averse foreign investors. Singh & Jun (1995, p. 20) highlight that political instability is a complex phenomenon and the empirical evidence regarding the impact of political risk on investment is not clear due to the difficulty in gathering reliable quantitative estimates of political risk. However, for host countries with a high level of FDI (such as Ireland) the significance of political risk is found to be greater. Furthermore, Nigh (1985, p. 11) found that for developed countries, the political events between the host and home countries were a significant determinants of FDI, whereas the political events within the host country itself had no impact on FDI. Furthermore, Wheeler and Mody (1992) found political risk to be statistically insignificant for investment, while Groh and Wich (2009) found that the political environment has less impact on FDI for more developed countries. Research by Kobrin (1979) found that institutional features such as political stability and government intervention in the economy are important determinants of foreign investment. According to Kinoshito and Campos (2002) political stability is described as a “necessary condition” for a host country to attract foreign investment. Thus, political instability detracts from the local investment climate and creates an unfavourable business environment for investment (Schneider & Frey, 1985).
  • 18. 11 2.2.4 High-Quality Government Institutions The qualities of government institutions play an important role in attracting FDI. For instance, poor legal protection of intellectual property decreases the possibility of firms making profits from their assets. In addition, poor quality institutions that develop standards for well-functioning markets and standards of treatment of foreign affiliates may increase the cost of business and reduce FDI investment (Blonigen, 2005; UNCTAD, 2011). Kinoshita and Kampos (2002), find that poor quality of the institutional bureaucracy in the host country is a deterrent to FDI. Furthermore, poor institutions may lead to poor infrastructure development, which reduces potential profits and FDI into the market (Blonigen, 2005). Thus for many MNCs, improving institutional governance and bureaucratic quality is seen as a favourable sign for investment (Kinoshita & Campos, 2002). 2.2.5 Industrial Policies for Knowledge Clusters The quality of government policy on industrial development and the quality of industrial promotion institutions are critical to the development of competitive clusters (UNCTAD, 2010). Evidence shows that countries with competitive advantages have aggressive promotional frameworks and industrial promotion agencies influence FDI investment, particularly “effective in a country with a good investment climate and a relative high level of development” (Morisset, 2003, p. 18). The work of the industrial promotion agencies to create areas of regional specialisation is crucial as these regions are positively associated with FDI (Dimitropoulou, et al., 2007). Kinoshita and Mody (1997) argue that the actions of competitors attracted through high quality industrial policies may lead to ‘apparent herd behaviour’. This herd behaviour is rational as it economises on the gathering of scarce information resources (Kinoshita & Mody, 1997). 2.2.6 International Trade Agreements on FDI The openness of the host country is a positive factor for foreign investment and openness to trade will drive an efficient environment, which is attractive to foreign firms (UNCTAD, 2010; Kinoshita & Campos, 2002; Piteli, 2010; Sawkut, et al., 2007). By contrast, other researchers have found that openness to trade is only a significant determinant of FDI for certain sectors (Walsh &
  • 19. 12 Yu, 2010; Artige & Nicolini, 2005) and certain types of FDI (Lim, 2001). Furthermore, Wheeler and Mody (1992) found that in the case of US firms the degree of openness of the economy had a negative impact on foreign investment while research in China showed more open policies son FDI had little impact on attractiveness (Li & Clarke-Hill, 2004). Studies on Japanese investment in Europe are fewer but trade barriers are highlighted as a factor in investment (Dunning, 1991; Encarnation & Mason, 1994; Mody, et al., 1998). However, Mody et al. found that the strongest disincentive to foreign investment by Japanese companies is the inability to repatriate earnings due to restrictive FDI policies. Moran (1998) suggests that a liberal investment climate tends to attract more dynamic FDI from innovative technological firms who are seeking to establish export-oriented operations. Conversely, a restrictive investment climate attracts MNCs that are less efficient and have older technology aimed at producing for the host market (Moran, 1998). As Ireland has a small domestic market, a more open and liberal investment climate would seem most attractive to Japanese investors. 2.3 Literature on the Importance of Economic Activity 2.3.1 Strong Macroeconomic Conditions Several studies have found that macroeconomic conditions including exchange rates, inflation and growth positively influence the decisions of foreign investors (Medvedev, 2006; Walsh & Yu, 2010; UNCTAD, 2010; Kinoshita & Campos, 2002; Piteli, 2010; OECD, 2003). Several studies find that political and economic stability are vital factors for foreign investors (Cieslik & Ryan, 2004; UNCTAD, 2011) and host-country financial risk ratings are important factors for investment (Razin, et al., 2008). Eicher et al. (2011, p. 18) find that higher taxes and financial risk increase FDI outflows from the host country, while lower taxes and financial risk have a positive effect on investment inflows. In a review of recent literature, Lim (2001) found that political risk and economic instability hinder FDI to the host country. Thus, a perception of higher perceived economic and financial risk is likely to reduce FDI investment.
  • 20. 13 In their research on FDI in central Europe, Barry & Bradley (1997) posit that FDI was enabled through a stable macroeconomic, fiscal and monetary climate. In the Irish context, the development of modern industrial and macroeconomic policies is viewed as vital in Ireland’s FDI success (Rios-Morales & Brennan, 2007) while Barry (2007) presents macroeconomic stability and membership of the EU as a significant determinant of investment inflow. However, Walsh and Yu (2010) find that macroeconomic conditions impact FDI in services more than manufacturing and inflation has little impact in terms of attracting additional FDI. Thus, the stability of the macro-economy is likely to be a significant factor for FDI in Ireland. 2.3.2 Access to Local Capital within a Stable Banking System The United Nations Congress on Trade and Development (UNCTAD) find that stability in the macroeconomic environment helps the longer-term growth of FDI and such stability leads to a predictable business climate where bank lending is more likely (UNCTAD, 2010). Ozturk (2007) carried out an extensive review of FDI literature and found evidence that financial market regulations and a stable banking system are significant determinants for FDI (Piteli, 2010). The recent banking restructuring and bailouts in Europe and Ireland may have implications for FDI flows in the years ahead (UNCTAD, 2011, p. 185). The World Investment Prospects Survey 2008-2010 (UNCTAD, 2008) reported that of 226 companies surveyed, fifty per cent of respondents expressed concern about the risk of a major global economic downturn and financial instability. Furthermore, this report highlights that access to local capital markets was a factor for investment and this factor favoured more developed countries such as Australia, the EU-15 and the United States (UNCTAD, 2008). Thus, the health of the banking system within a stable economic platform in Ireland is seen as important for foreign investment. 2.3.3 Low Levels of Corruption and Risk While banking and financial risk are important, many MNCs find that the level of corruption influences the decision to invest in a host country. A survey of 191 MNCs by the World Bank found that 36% of companies sited the level of corruption as very influential in the investment decision, with this figure rising to 38% for investment in Western Europe (World Bank, 2002). Some studies
  • 21. 14 have shown that corruption increases the level of risk and costs and impacts FDI flow (Mauro, 1997; Wei, 2000; Rios-Morales & Brennan, 2007). However, some countries continue to attract FDI despite corruption (Kolstad & Villanger, 2004) and in a US study, Wheeler and Mody (1992) found that the level of corruption was not a deterrent to investment. Walsh and Yu (2010) point out that these differences on the influence of corruption may be down to using different metrics and different types of data. In a review of Foreign Direct Investment incentive policies, the OECD reported that grants and other incentives might encourage corruption and bribery (OECD, 2003). Furthermore, Kobrin (1979) found that institutional features such as the degree of “red tape” and corruption are important factors that influenced the decision of foreign investors. In a study of FDI in transition economies, Kinoshita and Campos (2002) find that the better the perception of the judicial system and the less corrupt the local bureaucracy the more FDI is attracted to the country. Thus, high quality institutions with low levels of corruption may be a significant factor for investment. 2.3.4 Access to a Strong Export Market Due to the small size of the domestic market, foreign subsidiaries of MNCs locate in Ireland so they can produce primarily for export (Barry & Bradley, 1997). O’Gorman et al. (1997) also highlight that the size of the Irish market and the influence of the state agencies was important in attracting export- orientated investment. Ireland’s membership of the EU has allowed it to become an export platform for MNC subsidiaries and its language and cultural links has allowed Ireland to become a favourable location for US FDI (Cassidy, et al., 2009). However, does such an argument apply for Japanese FDI in Ireland? Cieslik and Ryan’s (2004) study of Japanese investment in Europe suggests that the host country’s ability to act as an export platform is an important factor in attracting inward investment and previous linkages with the host economy by Japanese investors is more important than domestic economy performance. This represents a ‘shift’ in the location choice of Japanese investors (Cieslik & Ryan, 2004) and may provide opportunities for Ireland. An earlier study by
  • 22. 15 Singh and Jun (1995) also find that export orientation is the strongest determinant of host country attractiveness for FDI, especially for countries with high levels of FDI. Thus, an open outward facing economy in Ireland is likely to be attractive to Japanese investors. 2.3.5 Growing Domestic and Regional Markets Several studies have identified the domestic market size (Sawkut, et al., 2007; Wheeler & Mody, 1992; UNCTAD, 2008; Lim, 2001) and more importantly access to a larger regional market (Lim, 2001; UNCTAD, 2010; Cheng & Kwan, 2000) as location-specific determinants of FDI. Some evidence suggests that although the determinants for both Japanese and US MNCs are different, the market size is a shared determinant (Fountas & Aristotelous, 1995). Reviews of the literature have shown that the growth of the domestic economy (Groh & Wich, 2009; Wheeler & Mody, 1992; Singh & Jun, 1995) and the host country’s market size (Torrisi, et al., 2008) increases inward FDI. Mody et al. (1998) found that Japanese investors in Asia considered the size of the host country’s domestic market to be an important factor in investment. Similarly, empirical research by Cieslik and Ryan (2004) suggests that Japanese FDI in Europe locates in countries with a combination of growing domestic markets and the ability to serve the regional market (Rios-Morales & Brennan, 2007). For Ireland, the size of the domestic market is of little significance to foreign investors who primarily locate here to export (Barry & Bradley, 1997; O'Connor, 2001). Although the Irish domestic market is not sufficient to attract FDI compared to other countries with larger domestic markets (Cassidy, et al., 2009), the right FDI policies and active investment promotion can help compensate (World Bank, 1997). Although Ireland’s entry to the EU saw an increase in FDI (Barrios, et al., 2005), a recent study of FDI in Ireland found 51% citing the size of the domestic market as a disadvantage for Ireland (Matheson Ormsby Prentice, 2012). Research by UNCTAD (2005) however, points out that pure R&D provides a new source of FDI not reliant on the domestic market or export-orientation. Thus Ireland can benefit from R&D based FDI.
  • 23. 16 2.3.6 Labour Force Costs and Productivity Although the market size may affect FDI inflows, the quality of the human capital base is also an important asset in attracting high technology MNCs. The OECD (2003) found that the presence of accessible human capital is an important factor when investors select an investment location. Several studies have found that FDI increases with low-cost labour in the host country (Barrell & Pain, 1996; Cheng & Kwan, 2000; Kinoshita & Mody, 1997; UNCTAD, 2008) and a highly productive workforce (UNCTAD, 2011; Cheng & Kwan, 2000). By contrast, Artige & Nicolini (2006) found that labour productivity was not consistent as a factor in FDI and its influence depended on the location and sector. Moreover, Groh & Wich (2009) argued that low-cost labour is not a primary motivator for investment and the combination of wage cost and productivity is more important. Ireland’s workforce is young and well-educated (IDA Ireland, 2011) and one of the most productive per person employed per hour worldwide (IDA Ireland, 2010). Sawkut et al (2007) highlight that a more educated workforce is generally more productive as it implements new technology more quickly and the level of tertiary education plays a key role in attracting high value-add MNCs (Miyamoto, 2003). Earlier empirical surveys of US MNCs in Ireland, by Gunnigle and McGuire (2001), found that labour quality and productivity was perceived favourably by executives. However, a study of US MNCs investing in Ireland and Bahrain showed that the availability of a skilled workforce was significantly more important in FDI decisions than low-cost labour (Gilmore, et al., 2003). However, Ireland has traditionally had higher productivity in the high-tech sectors than the European average and high quality human capital in these sectors (Hewitt-Dundas, et al., 2010), and this may influence the fact that labour cost is not seen as a critical factor in MNC investment in Ireland (Gunnigle & McGuire, 2001). 2.3.7 Access to High-skilled Labour Other studies have shown that increased levels of human capital are a good indicator of high-skilled labour and make the host country more attractive for FDI. Schneider & Frey (1985), Borensztein, et al. (1998) and Noorbakhsh, et
  • 24. 17 al. (2001) found that the access to high skilled labour is a significant determinant of a nation’s location advantage and is important in attracting FDI. The importance of skilled labour can be observed in Irish foreign-dominated sectors, which employ higher proportions of skilled labour than industry on average (Barry & Bradley, 1997) The need for skilled labour favours the more developed economies with a broader knowledge, research and innovation base. Research by Dimitropoulou, et al (2007) in the UK highlights the importance of the knowledge and research base for attracting FDI. The research and innovation performance of Ireland and the EU however stills lags behind the US and Japan (Lohan, 2007). As measured by gross domestic expenditure on R&D, the US (2.79%) and Japan (3.45%) have invested significantly more than the EU average (2%) and Ireland (1.79%) (Eurostat, 2012). The Irish Development Agency (IDA) see the establishment of world-class research and innovation base through MNCs and research institutes as crucial in attracting FDI to Ireland: “Ireland is gaining increasing recognition as a location in which to innovate and is empowering some of the leading global corporations to carry out research, development and innovation across a wide platform of activities, thereby enabling their future potential to create and commercialise new processes, products and services” (IDA Ireland, 2012) 2.3.8 Clusters and Agglomeration Effects The exploitation of such research and innovation is linked to government policies on industrial development and regional zones of FDI. The literature is extensive on the positive impact of agglomeration economies and clusters on FDI decisions (Head, et al., 1995; Wheeler & Mody, 1992; Kinoshita & Campos, 2002; Walsh & Yu, 2010; UNCTAD, 2011). Wheeler and Mody (1992) found clustering to be highly significant determinant of FDI in a study of US manufacturing MNCs. An important finding for Ireland by Kinoshita & Campos (2002) is that agglomeration effects reduce the importance of market size as a location determinant. This finding confirms research by Barry and Bradley (1997) that newly arrived MNCs in Ireland in the high-tech sectors are
  • 25. 18 strongly influenced by the fact that other key market players are already located in Ireland (Lim, 2001). In addition, Rios-Morales & Brennan (2007) find that Japanese FDI into Europe has been strongly influenced by agglomeration effects and it is a key determinant for location decisions by Japanese investors. Moreover, Head et al. (1995) argue that increases in agglomeration increase the probability for future investment selection; however, agglomeration effects alone may not encourage further FDI by Japanese investors if other location factors are not seen as attractive. 2.3.9 Low-cost operating environment & High Quality Infrastructure The quality of infrastructure including ports, roads, power grids and telecommunications infrastructure are a significant factor in FDI decisions for MNCs (Li & Clarke-Hill, 2004; UNCTAD, 2011). This demand for quality infrastructure favours investment in more developed regions such as the EU and the US (UNCTAD, 2008). In addition, Cheng and Kwan (2000) and Walsh and Yu (2010) found that good infrastructure had a positive effect on location attractiveness and leads to higher FDI inflows while Liang (2004) argues that differences in transport and communications infrastructure affect the location decisions of MNCs at both country and intra-country levels. However, Mody et al (1998) argue that high quality infrastructure is not a necessary condition for initial investment but infrastructure improvements are required to encourage further FDI inflows. Thus, good infrastructure is a performance- related determinant for FDI and an expected feature in developed economies such as Ireland. Such good quality of infrastructure helps to lower business operating costs for MNCs. Minimising the cost of doing business including the availability of low- cost transport, communications, energy and other operating factors are seen as important determinants for foreign investment (UNCTAD, 1998; UNCTAD, 2011). Transport and communications costs to/from and within the host economy are seen as significant factors by UNCTAD (1998) but evidence from Lim (2001) finds that transport costs effect on FDI depends on the type of FDI undertaken. In any case, it is expected that lower operating costs will be viewed favourably by Japanese MNCs.
  • 26. 19 2.4 Literature on the Importance of Business Enablement 2.4.1 Access to Progressive Investment Promotion Incentives Initial efforts to attract foreign investors rely on investment promotion agencies building an image for the country and develop investment facilitation services (Li & Clarke-Hill, 2004). As mentioned previously, Morisset (2003, p. 18) argues that promotion agencies with aggressive FDI campaigns positively influence FDI decisions, particularly where the country has a good overall investment climate. Similarly, the World Bank (1997) finds that promotion only succeeds when the country is attractive to investors. The efficiency of such promotion institutions is reflective of government effectiveness, which is a significant locational factor for investors (UNCTAD, 2008). Thus, the success of Ireland’s ability to attract FDI reflects on the efficiency of the IDA. The investment promotion agencies also help to provide access to information, facilitate clear communication and reduce legal and bureaucratic issues (UNCTAD, 2011). Groh and Wich (2009) find that the costs and complexity of bureaucracy influence FDI decisions and is an important determinant for FDI inflows. In their analysis of FDI in developing countries, Singh & Jun (1995) and Lim (2001) argue that excessive bureaucracy constrains economic growth through FDI. In contrast, Wheeler and Mody (1992) find that “red-tape” and bureaucracy risk has a very limited effect on FDI decisions by MNCs. The maturity of the legal system also affects the host country’s appeal. Lim (2001) finds that less red tape including regulatory, judicial, labour relations and contract issues create a friendlier business environment that attracts investors. Ramcharran’s (2000) study of Central and Eastern European countries finds that regulatory and country risk affects FDI flows and a restrictive legal environment is a significant disincentive for FDI. Several other studies have found that the quality, stability and transparency of the legal system are crucial for encouraging FDI inflows (Baniak, et al., 2005; Naudé & Krugell, 2007). Thus, systems of governance that promote the rule of law may be major factors in Ireland’s ability to attract FDI.
  • 27. 20 2.4.2 Access to Local Amenities and High Quality of Life Other business facilitation efforts that influence the location-specific determinants of FDI are the provision of appropriate social amenities and after- investment services. The quality of life and social amenities are significant for investment (UNCTAD, 2010; UNCTAD, 2011; Li & Clarke-Hill, 2004). As competition for FDI investment from targeted MNCs intensifies, the use of these business facilitation practices help enhance location-specific advantages (UNCTAD, 1998). Globerman & Shapiro (2004) find that countries that invest in improving quality of life attract more FDI while Hornberger et al. (2011) find that quality of life and language skills were one of the top ten determinants for foreign firms investing in developing and transition economies. In examining why US MNCs invest in Ireland, Gunnigle and McGuire (2001, p. 53) highlight that many MNCs want to locate in Dublin for quality of life reasons. Thus, quality of life is an increasingly important incentive for attracting FDI to Ireland. 2.4.3 Previous Investment or Knowledge of Ireland The decision to invest in a particular country is influenced significantly by the public and private information available to the foreign MNC. Investors’ location decisions are influenced by public information including analytical country reports by international organisations (Kinoshita & Mody, 1997). Furthermore, private information such as direct experience in the host country and previous experience is viewed as information that is more credible and a significant factor in FDI decisions (Kinoshita & Mody, 1997). In reviewing the attractors of Japanese MNCs in Asia, Mody et al. (1998) point out that although favourable FDI policies may be attractive, previous presence in the country is likely to increase Japanese FDI. This observation is further confirmed by Cieslik and Ryan (2004) as they explain Japanese investment into Europe. Thus, flows of credible information from existing Japanese subsidiaries may be crucial for further Japanese investment in Ireland.
  • 28. 21 2.5 A Conceptual Framework for FDI Determinants Based on the literature review of policy, economic and business facilitation determinants the following conceptual framework is proposed (See Figure 2-1). This framework highlights the importance of government policy as a foundation for FDI (Lall, 2002) and its implications (dotted line) for business facilitation and economic determinants. Figure 2-1: Conceptual Framework of FDI determinants 2.6 Conclusion This chapter has highlighted the important determinants of FDI as elucidated by the academic and empirical literature. The locational determinants of FDI are clearly driven by policy, economic and business facilitation drivers but the actual determinants depend greatly on the context and motives of the MNC. Dunning (1995) highlights that the factors of FDI are complex and there is no single explanation for all FDI determinants. Thus, the attractiveness of location is part tangible, part intangible and is strongly influenced by government within a complex web of interrelated factors.
  • 29. 22 3 Research Methodology 3.1 Introduction This chapter explains the research methodology employed for this study and the rationale for such study. It develops the theme from the primary and secondary research questions through to the reasoning for the selected research approach. Finally, it concludes on the limitations of the research methodology. 3.2 Research Design The research design outlines the framework used to deliver the most valid answers to the research questions posed (McMillan & Schumacher, 1993). As Yin (1994, p. 19) states, “every type of empirical research has an implicit, if not explicit, research design”. Moreover, Maxwell argues that as a design always exists, it should be made explicit to highlights its “strengths, limitations and consequences” (2005, p. 3). The research design for this study provides the structure for investigation (Kerlinger, 1986, p. 279; Saunders, et al., 2009, p. 137) and sets out the selection of research methods and the use of the Kano model (Kano, et al., 1984). The research questions are also discussed in terms of the research project (Robson, 2002) and the procedures for information collection, from which source and under what conditions data were collected (Green & Tull, 1970, p. 73), are clearly outlined. 3.2.1 Research Questions The aim of this paper is to address one primary research question: PQ 1. What are the location-specific factors that influence the decision by Japanese MNCs to invest in Ireland? In addressing this primary research question, this paper seeks to answer the following two related secondary questions: SQ 1. What are the perceptions of managers in Japanese MNCs as to the key factors in investing in Ireland: the role of policy determinants, economic determinants and business facilitation determinants? SQ 2. Given the perceived locational determinants for FDI in Ireland, what can Ireland do to encourage greater investment from Japan?
  • 30. 23 3.2.2 Research Methods In this study, a mix of qualitative and quantitative methods is used to answer the research questions. The study consisted of two research phases, the Qualitative and Quantitative research phases, supported by various research methods to answer the research questions, as shown in Figure 3-1 below. Figure 3-1: Mixed Method Research Design Framework The Qualitative Research Phase was designed to gain insight into the perceptions of managers as to the location-specific factors influencing Japanese firms investing in Ireland and to understand their perceptions of Ireland as an investment location. This phase is built around a case study of Fujitsu, a Japanese MNC, and its recent investment in the Irish ICT sector. In this Qualitative phase, semi-structured interviews and a questionnaire were used to gather data. This phase was intended to address the secondary research questions and contribute to the primary research question. On the other hand, the Quantitative Research Phase was designed to understand the salient location determinants for FDI in Ireland by Japanese MNCs. This Quantitative phase also aimed to categorise and rank those determinants to understand the contribution of country-specific factors to location attraction. This phase used the Kano questionnaire to collect data and address the primary research question.
  • 31. 24 3.2.2.1 Mixed Methods Research The framework in Figure 3-1 shows how the study employed both quantitative and qualitative research to answer the primary and secondary research questions in this research. In an effort to understand the choice of mixed- method research, perhaps it is appropriate to restate the primary research question (PQ1): What are the factors that influence the decision by Japanese MNCs to invest in Ireland? Punch (2005, p. 19) argues that questions seeking to determine the ‘factors which affect’ and the ‘determinants of’ imply a quantitative approach. Thus, the framework shows how questionnaires are used within a survey strategy to provide quantitative answers in the research. To explore these factors for foreign investment further, the first secondary research question (SQ1) asks “What are the perceptions of managers in Japanese MNCs as to the key factors in investing in Ireland: the role of policy determinants, economic determinants and business facilitation determinants?” This question seeks to explore perceptions and ‘describe the experiences’ of managers which lends itself to a qualitative approach (Punch, 2005, p. 19). The final question (SQ2) states, “Given the perceived locational determinants for FDI in Ireland, what can Ireland do to encourage greater investment from Japan?” Again, this question is exploratory, seeks to understand perceptions, and thus is more suited to qualitative research methods. Thus, the framework shows how semi-structured interviews and secondary data within a case study research strategy provide such qualitative insight. The qualitative approach also uses the questionnaire to provide measurable and comparable data with the survey data in the research. The authors decision to use mixed-methods as outlined in the framework is expected to provide greater opportunities to answer the research questions (Johnson & Onwuegbuzie, 2004) and allow better evaluation of the trustworthiness of the research findings by reducing the impact of ‘method effect’ (Tashakkori & Teddlie, 2003; Saunders, et al., 2009). Thus, such an approach is warranted and it will provide consistent results that can be developed further in the future.
  • 32. 25 3.3 The Research Project 3.3.1 Selecting the Research Topic The author identified two reasons to study the determinants of foreign investments by Japanese MNCs in Ireland. Firstly, Japan stands as the fourth- largest economy in the world after first place US, second-place China and third-place India (CIA, 2012). However, in Ireland, the level of FDI by the US dwarfs FDI from Japan with minimal FDI from India (CSO , 2011). For instance, Japan holds 2% of the FDI base in Ireland compared to 74% by the US, when measured by number of employees (CSO , 2011). Moreover, when measured by number of multinational firms, Japan has 23 firms (2%) in Ireland compared to 515 (53%) form the US (CSO , 2011). Thus, the author recognised that attracting greater FDI from Japan represents an opportunity for greater expansion of the Irish FDI base and the potential for future economic success. Secondly, the literature on FDI in Ireland is focused on US MNCs (Gunnigle & McGuire, 2001; Baibekova & Hoang, 2010; IDA Ireland, 2011) and considering the number of companies and level of employment this makes sense. By contrast, research on FDI by Japanese companies in Ireland is limited (Rios-Morales & Brennan, 2007) and there has been no research to date to identify the location-specific determinants that may be unique to Japanese investors in Ireland, to the knowledge of the author. 3.3.2 The Qualitative Research Phase The Qualitative Research Phase is focused on a case study to explore the salient location-specific factors that influence FDI by Japanese MNCs. Case study research is “principally about [the] interpretation, subjectivity and meaning” (Ryan, et al., 2004) of a particular contemporary phenomenon within its real world context, using multiple sources of evidence (Robson, 2002; Yin, 2003). Due to the exploratory nature of the research, a case study was judged appropriate for this phase. This is a revelatory case where the researcher has access to experiences that were previously inaccessible (Tellis, 1997; Yin, 1994). Tellis (1997) points out that single case study research requires careful investigation to avoid misrepresentation and enable the researcher to maximise access to the evidence. Thus, using a case study, theories may be expanded and
  • 33. 26 generalized by combining the existing theoretical knowledge with new empirical insights (Yin, 1994). Research suggests that it is possible to generalise from just one case study (Gummeson, 2003; Stuart, et al., 2002; Tellis, 1997) and if causal relationships can be identified, they may be true for some structurally similar cases (Hillebrand, et al., 2001). Conversely, it has been argued that individual cases, by their nature, are often difficult to generalise (Vissak, 2010) and cannot be controlled statistically (Yin, 1994). Saunders et al. (2009, p. 158) note that the purpose of a single case study is not to produce a theory that is generalizable to all population but to try to explain what is going on in a particular research setting. 3.3.2.1 Choosing the Company By choosing a single representative Japanese firm in the Qualitative Phase, the researcher was able to gather a greater amount of information on the company than would be possible in a larger study. The research of a single case study also benefits from the gathering of unstructured and detailed data that can be analysed for greater insights (Diluna, 2003) This paper examines the foreign direct investment by Fujitsu Ltd Japan (hereinafter Fujitsu) into a joint research collaboration with the Digital Enterprise Research Institute (DERI) in Galway, Ireland to explore the research question. Although this project also involved the Irish Industrial Development Authority (IDA) and Science Foundation Ireland (SFI), this case study only focuses on Fujitsu and the locational factors that influenced its decision to invest in Ireland. The investment by Fujitsu Ltd worked closely with its subsidiary Fujitsu Ireland Ltd (hereinafter Fujitsu Ireland). For completeness of the study, interviews were conducted with key players in the project from Fujitsu and Fujitsu Ireland. 3.3.2.2 Instrument Development Yin (2003) identified six types if information that can be used to create a case study. These types of information are documentation, archival records, interviews, direct observation, participant observation, and physical artefacts
  • 34. 27 (Yin, 2003). This study used documentation and interviews with senior staff within the company with direct experience of the FDI engagement. Participant observation was also recorded using a questionnaire. 3.3.2.3 Data Collection The primary and secondary data for the Qualitative Phase was gathered in June and July 2012. The secondary sources relate to literature on FDI determinants, FDI by Japanese companies and Ireland’s economic growth factors. This secondary data was used to access the perceived importance of FDI determinants by various authors and identify those factors that related particularly to FDI by Japanese MNCs. The main sources of secondary data were found online in Journals, eBooks, library databases, online statistics sources and online reports from Irish, European and Japanese institutions. Great care was taken to refer to the most recent literature to ensure that data reflected the current situation for FDI in Ireland. Primary data was gathered using semi-structured interviews and questionnaires. 3.3.2.4 Interviews A semi-structured interview schedule was used which is divided into three themes with 11 questions as show in Table 3-1. The first theme explored the key factors for investment and examined (i) the motives and (ii) the influencing factors for investment. The second theme delved into perceptions of (iii) the investment landscape, (iv) Japanese sentiment toward Ireland, (v) the role of the Irish Government in FDI, (vi) most attractive policies for Japanese investors, (vii) influence of economic factors, (viii) the ease of doing business, (ix) the quality of labour and (x) previous knowledge of the investment location. The last theme focused on the future and explored (xi) what Ireland could do to attract further FDI investment. Interview Theme Ideas Explored Perceptions of Investment Factors (i) Motives for Investment (ii) Influencing factors for Investment Perceptions of Ireland (iii) The investment landscape (iv) Japanese sentiment toward Ireland, (v) The role of the Irish Government in FDI (vi) Most attractive policies for Japanese investors (vii) Influence of economic factors
  • 35. 28 (viii) The ease of doing business, (ix) Quality of labour (x) Previous knowledge of the investment location Perceptions of Future (xi) What Ireland could do to attract further FDI investment Table 3-1: Semi-Structured Interview Themes The five interviews were all carried out with senior management employees within Fujitsu over a 6-week period. The questions followed the themes as per Table 3-1 and structured based on the research carried out in the literature review. These interviews provided the opportunity to gather detailed qualitative data on Fujitsu’s perceptions of FDI in Ireland and get a sense of how Ireland was performing in FDI attractiveness for Japanese MNCs. The interview schedule is laid out below in Figure 3-2. Interview No Interview Method Job Title Involvement in FDI Project 1 In-Person CEO Sponsor on Project 2 In-Person Head of Innovation Lead on Project 3 In-Person Head of Marketing Promotion of Project 4 In-Person Head of Legal Legal on Project 5 On Phone Head of Strategy Strategic Lead Figure 3-2: Details of Interviews 3.3.3 The Quantitative Research Phase While the qualitative research phase provided answers to the secondary research questions, a quantitative survey approach was judged necessary to answer the primary research question. Quantitative research creates or uses numerical data, such as questionnaires, statistics and graphs (Saunders, et al., 2009, p. 151). Questionnaires provide objective data and can examine cause and effect relationships using a deductive process of knowledge attainment (Charoenruk, 2010). The questionnaire design follows the Kano model outlined below to provide new insight on FDI factors. 3.3.3.1 Choosing the Survey Sample For the Qualitative research phase, a judgement sample was used. The author believes that this judgement sample of respondents meet the requirements of the study (Hair, et al., 2008). There are 23 Japanese MNCs in Ireland, all of
  • 36. 29 which were included in the sample frame. To obtain further insight into foreign investment by Japanese firms in Ireland, representatives of the IDA and Japanese business forum in Ireland were also selected. By choosing a sample frame of all Japanese MNCs in Ireland and representative bodies involved with Japanese investment, it is believed that findings can be generalised at least within the Irish context. 3.3.3.2 Instrument Development Creating a survey questionnaire allows a large amount of data to be collected and analysed economically (Saunders, et al., 2009, p. 144). Questionnaires are some of the most widely used data collection techniques within the survey strategy (Saunders, et al., 2009, p. 361) and using standardised questions it allows an efficient way to gather data from a large number of respondents. A questionnaire was selected to gather opinion and attribute variables as described by Dillman (2007). In gathering opinion variables, the author determined that the use of the Kano model for designing the survey questionnaire would provide new insight and allow new comparisons to previous research described in the literature review. The development of the Kano Questionnaire is described in the following sections. 3.3.3.3 Kano Questionnaire 3.3.3.3.1 Introduction This section discusses the Kano Method as a new lens to view the location- specific determinants of FDI in Ireland. 3.3.3.3.2 A Gap in FDI Determinant Analysis Most previous studies on FDI determinants have focused on identifying the significance of various determinants within a particular context as seen in Figure 3-3. Thus, for decades various authors have attempted to identify the most important FDI determinants with little effort to understand the relative interdependence and strata of determinants for FDI investment. Type of FDI Research Author Focus of Research Quantitative Primary Singh & Jun (1995) Lim (2001) Find FDI factors most strongly linked with investment attraction of the host country. Quantitative Secondary Chakrabarti (2001) Blonigen (2005) Confirm external validity of important FDI determinants
  • 37. 30 Qualitative Artige & Nicolini (2006) Identify the most positive and statistically significant determinant of FDI Quantitative Secondary Piteli, 2010; UNCTAD, 1998 Provide lists of significant FDI Determinants Quantitative Secondary Jones (1980) Understand national comparative and absolute advantages Figure 3-3: Focus of FDI research by various authors These strata or layers of FDI determinants are evident in much of the foreign investment literature. Firstly, a recurrent theme within the literature was the concept of FDI determinants that were necessary for investment to occur but by themselves are not sufficient. “Our results reveal the need for policy to be decentralized to the regional level. Since many of the essential determinants of economic performance appear to reside in regions, national policies will be necessary but not sufficient.” (Porter, 2003, p. 571) A second layer of locational attraction is evident in suggestions that FDI investment increases in direct correlation to improvements in specific FDI factors. For instance, currency increases and increases in human capital investment are linked to increases in FDI. “The probability that a country will be the recipient of high-tech FDI increases with its investments in human capital and with higher GDP per capita” (Globerman & Shapiro, 2004, p. 24) These advantages may be viewed as performance factors as the performance of the determinant is linked directly to FDI inflows. Thus, knowing the difference between the necessary and performance strata of determinants is vital for a country to focus attention on areas that improve its FDI attractiveness. Interestingly, location-specific factors of foreign investment can be viewed through a third lens. This lens is comparable to Jones’ (1980) absolute advantages as these factors truly distinguish one region from another. “the most attractive location advantages for export-oriented MNCs are now world-class infrastructure, skilled and productive labour, and an
  • 38. 31 agglomeration of efficient suppliers, competitors, support institutions and services” (Puga & Venables, 1999; Liang, 2004, p. 84) These absolute advantages for FDI investment are differentiated from the necessary and performance factors, as they are the regional factors that attract and delight investors the most. Thus, three distinct layers can be discerned - necessary, performance and attractive features - that work together to attract investment to a specific location. 3.3.3.3.3 Applying the Kano Model So, how can these new lenses of location-specific determinants of FDI be best understood? The Kano model helps to develop product and service attributes that are “both functionally and emotionally satisfying to customers” (MacDonald, et al., 2006). Kano’s model presents five quality attributes based on the relationship between perceived sufficiency of quality on the horizontal axis and customer satisfaction with that attribute (Lai & Wu, 2011) as shown in Figure 3-4. Figure 3-4: The Kano Model (Source adapted from (Yang, 2005))
  • 39. 32 Yang (2005) describes the Kano model with five categories of quality attributes: attractive, one-dimensional, must-be, indifferent and reverse quality attributes as shown in Figure 3-5. Kano Category (Alternative Names) Description (Adapted) Attractive (Delighter, Value-Add) The Attractive (A) curve means that a feature of the country provides extra satisfaction when present but the country is still satisfactory when the feature is absent. One-Dimensional (Performance, Proportional) The One-Dimensional (O) line means that the more functional the feature within the country the more satisfied the investor and vice versa. Must-Be (Basic, Expected) The Must-be (M) curve indicates aspects where the investor is more dissatisfied when the country attribute is less functional, but where the investor’s satisfaction never rises above neutral no matter how functional the attribute becomes. Extra effort spent improving such features would make little impact on satisfaction for the investor. Indifferent The Indifferent (I) circle means that a feature of a country does not provide either satisfaction or dissatisfaction to the investor. Reverse The Reverse (R) line means that a feature being present in a country causes dissatisfaction. Such features should be eliminated. Questionable The Questionable (Q) category means that scores signify that the question was phrased incorrectly, or that the person misunderstood the question Figure 3-5: Description of Kano Categories (Adapted from (Berger, et al., 1993, pp. 3-5)) Kano’s model of attractive quality proposes that quality attributes are dynamic and change from attractive to one-dimensional to finally being must-be over time (Kano, 2001). Using a specific Kano questionnaire and evaluation tables, the perceptions of respondents are grouped into the Kano categories. The classification of a feature is determined by: Kano category = maximum (A, O, M) if (A+O+M) > (I+Q+R) or maximum (I, Q, R) if (A+O+M) ≤ (I+Q+R), (Lai & Wu, 2011). Classifying country attributes into the Kano categories provides many advantages. These advantages have been adapted from Sauerwein, et al. (1996):  Prioritise attribute development: Investing in attractive and one- dimensional aspects of country attributes provides greater value for money than developing must-be attributes, which are already at a satisfactory level.
  • 40. 33  Country attributes are better understood: The country features that have the greatest influence on foreign investor attraction can be identified. Classification of attributes allows greater targeting of resources to attract FDI.  Focused Industrial Development Activities: Kano’s model helps establish the importance of individual country features in satisfying foreign investors. Thus, it creates the optimal prerequisite for industrial development activities.  Trade-off Decisions: the Kano method provides valuable insight for trade-off situations in industrial development. Where two country features cannot be developed simultaneously, due to technical or financial reasons, differentiation can occur based on the feature with greatest influence on investor attraction.  Country Differentiation: Uncovering the attractive attributes of the country create a range of possibilities for differentiation. A country that only satisfies must-be and one-dimensional requirements may be perceived as average in international markets. Thus, the use of the Kano model to guide the development of the survey questionnaire and the resulting quantities analysis will provide new categorisation of FDI determinants and deliver new insights for developing FDI features to attract Japanese investment in Ireland. 3.3.3.3.4 Constructing the Kano Questionnaire In the Kano questionnaire, each question consists of two parts: functional and dysfunctional (Kano, et al., 1984). Functional questions are questions that ask how the respondent feels if an investment feature is present. Dysfunctional questions asks how the respondent feels if the investment feature was not available. Both types of questions were formulated for each FDI feature that was identified in the literature. When conducting the survey, respondents had the choice of five multiple-choice answers as shown in Table 3-2: Kano Response Choices
  • 41. 34 Kano Response Choices Description I like it This is the most positive answer. It means that the factor is very attractive for investment purposes. I expect it This is a slightly positive answer. It means that the factor must be present to undertake investment. I do not care This is neither positive nor negative. It means that this factor has neutral impact on investment. I can live with it This is a slightly negative answer. It means that the factor can be tolerated for investment purposes. I dislike it: This is the most negative answer. It means that the factor is very unattractive for investment purposes. Table 3-2: Kano Response Choices (Kano, et al., 1984; ter Maat, 2011) 3.3.3.3.5 Data Collection using the Kano Questionnaire The questionnaire created for this research was constructed using SurveyMonkey™ and consisted of five pages (see Appendix I Online Questionnaire). The first page introduced the survey, and details on the secure handling of data in line with Data Protection legislation. It then asked for some basic demographic details about the respondent and their organisation like nationality, company sector and job title. The second page consisted of six questions on the Policy Factors for Investment in Ireland. The third page looked for responses on eleven questions relating to economic factors for investment. The fourth page consisted of six questions on business facilitation factors for investment in Ireland. The final page surveyed the respondents’ perceptions of the importance of investment factors and provided a freeform box for comments on Japanese MNC investment in Ireland. The survey was sent to all 23 Japanese MNCs located in Ireland (see Table 3-3) and two relevant organisations with insight on Japanese investment in Ireland (see Table 3-4). No Company Name Questionnaire type Industry Sector 1 Alps Electric (Ireland) Limited Self-administered Hardware Information and Communications Technology (ICT) 2 Astellas Ireland Co., Ltd. Self-administered Pharmaceuticals 3 Carten Controls Limited Self-administered Hardware Information and Communications Technology (ICT) 4 Daiwa Europe Fund Managers Ireland Ltd Self-administered Financial Services 5 Fujitsu Ireland Ltd Self-administered Information and Communications Technology (ICT) 6 Goodman Medical Self-administered Medical Technologies 7 Hitachi Koki Europe Ltd Self-administered Hardware Information and Communications Technology (ICT)
  • 42. 35 8 KG Aircraft Leasing Co Ltd Self-administered Financial Services 9 Neriki Europe Ltd Self-administered Industrial Products and Services 10 Ohshima Ireland Limited Self-administered Hardware - Information and Communications Technology (ICT) 11 Orix Ireland Ltd Self-administered Financial Services 12 Rexxam Electronics Irl. Ltd Self-administered Hardware Information and Communications Technology (ICT) 13 SHIMADZU CORPORATION Self-administered Advanced Science 14 Sojitz Aircraft Corporation Self-administered Financial Services 15 Sumitomo Mitsui Finance Dublin Limited Self-administered Financial Services 16 Swiftcall Long Distance Self-administered Business Services 17 Takeda Ireland Ltd. Self-administered Pharmaceuticals 18 THK Manufacturing of Ireland Ltd. Self-administered Industrial Products and Services 19 Trend Micro (EMEA) Ltd Self-administered Software - Information and Communications Technology (ICT) 20 Uchiya Ireland Ltd Self-administered Industrial Products and Services 21 Yakult Ireland Self-administered Food & Drink / Healthcare 22 Mitsubishi Motors Self-administered Motor Vehicles 23 Sony Self-administered Electronics Table 3-3: Table of All Japanese Firms in Ireland included in survey No Company Name Questionnaire type Industry Sector 1 IDA Ireland Self-administered Semi-state Body 2 Telegael Ltd Self-administered Information/Media Group Table 3-4: Table of other respondents included in Survey 3.3.3.3.6 Evaluate the Results using the Kano Model In order to interpret the results of the survey, a matrix (see Table 3-5) is used to analyse each response. Table 3-5: Kano Evaluation Table (Source (ter Maat, 2011; MacDonald, et al., 2006; Berger, et al., 1993) As each response is plotted on the table, a response outcome is recorded. 3.3.3.3.7 Categorise and Prioritise FDI Features Based on the response data, the investor FDI attribute can be placed into the relevant Kano category. The customer satisfaction coefficient can also be determined: The customer satisfaction coefficient states whether satisfaction
  • 43. 36 can be increased by meeting an FDI requirement, or whether fulfilling the FDI requirement merely prevents the customer from being dissatisfied (Berger, et al., 1993). The customer satisfaction coefficient is measured using the following formulae. Extent of satisfaction: (A+O) / (A+O+M+I) Extent of dissatisfaction: (O+M) / (A+O+M+I) * (-1) In addition, the FDI determinants can be prioritised using the rule provided by Berger et al. (1993): Must-be > One-dimensional > Attractive > Indifferent. However, in some cases, it can be unclear as to which feature to prioritise and in these cases, the “self-stated-importance” scores provided by respondents will be used to determine the priority. 3.4 Limitations of Methods Used Although the research methods chosen for this study were carefully prepared and developed, there are several limitations. First, the research was conducted over a three-month period, at intermittent stages. Research over a longer period may have allowed greater insights from the interview process. Second, the author is currently employed by Fujitsu and while not directly involved in the foreign investment, has familiarity with the people involved. This familiarity may lead to bias and subjectivity but at all stages the author maintained objectivity and followed best practice on using open-ended questions in interviews. Third, the population for the survey group is small with only 23 firms in the sample. This limitation is not controllable however, as there are only 23 Japanese firms in Ireland. While the study may not be generalizable, the survey may be generalizable within the Irish context. Finally, while the use of the Kano model provides a new lens for FDI determinants, there is the difficulty of adapting the model appropriately for this study. It may be argued that such application is not appropriate but the author believes its applicability has been sufficiently demonstrated.
  • 44. 37 3.5 Conclusion In summary, this study proposes to identify the location-specific determinants of FDI in Ireland for Japanese MNCs. The objective of the research is to understand the various perceptions of Japanese MNCs and compare those perceptions to the extant literature. To do this a dual-phase approach was developed to gather a combination of qualitative and quantitative data in an effort to reduce the impact of ‘method effect’ (Tashakkori & Teddlie, 2003; Saunders, et al., 2009). The qualitative phase involved a case study, which gathers real-world information on Fujitsu’s foreign investment in Ireland, providing rich data on the case. The quantitative phase used an online questionnaire based on the Kano model.
  • 45. 38 4 Findings and Discussion 4.1 Introduction This section presents the findings from the two-phased process outlined in chapter three. As this study used mixed-methods to gather the data using both semi-structured interviews and questionnaires, the results will be developed by first highlighting the results from the survey and then compare these findings to those from the case study interviews. This approach will provide greater understanding of the findings and enable patterns to be established. These comparisons between methods will also help answer the primary and secondary research questions. The findings are also discussed in each section to highlight any insights from the data. 4.2 Findings from Questionnaire The topics in the questionnaire were based on the themes from the literature and designed around the conceptual framework in Chapter 2. Each topic was developed into associated Kano questions and importance ranking questions (as per Appendix I Online Questionnaire). 4.2.1 The Survey Sample The overall response to the survey was 52%, with 11 of the 23 Japanese MNCs in Ireland (See Figure 4-1) providing a response and both of the independent bodies also completing the questionnaire. Figure 4-1: Survey Sample and Response Rate 23 11 2 2 Survey Distribution Survey Response Survey Sample & Response Rate Japanese MNCs Japanese Interest Bodies
  • 46. 39 4.2.2 Demographic Data Respondents were asked to supply demographic data as outlined below. A summary of the demographic data is provided in Figure 4-2 and it shows that Group 2 consisted of companies in multiple industry sectors. The respondents were of varying nationalities, with significant time in senior positions within their respective companies. Thus, the respondents fit well to answer the primary and secondary research questions regarding perceptions of managers in Japanese MNCs. Figure 4-2: Summary of Demographic Data 0% 50% 100% Irish Japanese Austrian Respondent Nationality 23% 31% 23% 7% 8% 8% Sector Distribution from Respondents ICT Financial Manufacturing Automotive Government Media 92% 8% Member of Management Yes No 0% 10% 20% 30% 40% 50% 5 to 10 Years 10 to 15 Years 15 to 20 Years 20 to 25 Years 25 to 30 Years Time in Company
  • 47. 40 4.2.3 Analysis using the Kano Model Before presenting the Kano Questionnaire results, the question topics as shown in Appendix I Online Questionnaire were given a short name for easier communication and display of the results (See Table 4-1). These short names will be used throughout the survey findings. Table 4-1: Short Names for Topics addressed in Survey Questionnaire
  • 48. 41 4.2.4 Survey results This survey consisted of 23 topics, with each topic having two sub-questions (functional and dysfunctional). The survey output from Survey Monkey™ (see Appendix I Online Questionnaire) required further analysis using Excel™ in order to present these findings based on the Kano Model. To the knowledge of the author, no online survey method is available for direct Kano presentation and analysis. This section will present the survey results post-analysis. An overview of the FDI feature categories and the consolidated survey responses is gained from the Kano Questionnaire results in Table 4-2 below. Table 4-2: Kano Questionnaire Results (Group 2) The Kano category has been calculated using the Berger et al. (1993) formula as outlined in Figure 4-3. Figure 4-3: Kano Category Selection Calculation. Source (Berger, et al., 1993, p. 13)
  • 49. 42 4.2.5 Prioritised Survey results Berger et al. (1993) proposed that simply viewing the satisfaction and dissatisfaction levels on the Kano model did not allow for enough differentiation between factors. The proposed model by Berger et al. (1993) is shown in Figure 4-4. Figure 4-4: Kano Functional Dysfunctional Graph. Source (Berger, et al., 1993) Using the Berger et al scoring mechanism, the results from the surveys were averaged to produce the following table (Table 4-3). Table 4-3: Average Dysfunctional, Functional and “self-stated-importance” scores
  • 50. 43 The results are difficult to decipher so the relevant section of the graph has been extracted in Figure 4-5 below. The figure shows a plot of the X-Y position in terms of functional and dysfunctional scores with the size of the individual bubble representing its importance score. To define and understand the most important FDI factors for Japanese firms investing in Ireland, the author proposes the use of “Constellations of FDI Importance”. This is based on the visual similarity between the bubble chart and astronomical phenomena and this helps to understand the relationship between FDI determinants for Japanese MNCs investing in Ireland. The author proposes four constellations of FDI importance from the survey results as shown in Figure 4-5. Figure 4-5: Constellations of Importance Again, the size of each point on the map represents the average importance score and this extra dimension provides a valuable addition to the results discussed in the previous sections. Taking the most significant determinants and linking them to related high-importance factors provides the following “constellations”.
  • 51. 44 1. The Quality People Triangle: The Japanese firms attach significant importance to the FDI factors of Productivity, Skills and Educated Workforce. Increases in all these factors are seen as highly satisfying and conversely reduction in these factors results in dissatisfaction. The results suggest that every effort must be made to develop the Irish workforce, as increases in these features will increase attractiveness for Japanese investors. 2. The Risk Spire: Foreign investment from Japan is risk averse and the perception of the Legal System and Corruption are of high importance. While improvements in these FDI factors will not result in as much satisfaction as the Quality People Triangle, any decline in these factors will lead to a greater overall dissatisfaction with Ireland as an investment location. 3. The Government Web: The role of Government is linked to a number of factors that respondents highlighted as relatively important. Quality Infrastructure, openness to trade, access to regional markets and bureaucracy are linked to government policy and impact on doing business. Further linkages to operating costs and taxation reflect the importance of profitability for Japanese MNCs. Although each determinant has a lower importance than the previous constellations, on aggregate the importance of the government role is an important determinant of FDI attraction. 4. The Industrial Development Circle: The development of high quality industrial policies leading to many specialised knowledge clusters is ranked with high importance. Improvements in this factor will lead to moderate satisfaction while deterioration will lead to moderate dissatisfaction. This circle seems incongruous but this may highlight that Industrial Development is a more attractive feature and highly valued by Japanese MNCs.
  • 52. 45 4.2.6 Top 5 FDI Determinants The questionnaire asked respondents to nominate the top five most important determinants from the 23 determinants listed. The opportunity to add additional determinants was provided but no respondent added any. The percentage of importance scores for each FDI determinant was calculated for each rank from 1 to 5. The results are shown in Figure 4-6 below where each respondent had 5 votes and thus the total response is 500%. Figure 4-6: Results from Top 5 Ranking in Survey Using the aggregate totals, the top five FDI determinants from the survey are shown in Figure 4-7 below. Ireland’s low corporate tax rate is still seen as the most important element by Japanese MNCs for investment in Ireland followed closely by the skilled workforce. The government’s role in maintaining stability and access to large regional markets is also of paramount importance. Interestingly, the domestic Irish market received no importance scores from any respondent and this may reflect the export nature of Japanese MNCs in Ireland.
  • 53. 46 Figure 4-7: Top 5 FDI Determinants from Survey 4.2.7 Discussion on Questionnaire Findings The results of the survey as shown in Table 4-2 provide initial feedback on the perceptions of managers within Japanese MNCs on the key factors that influence them investing in Ireland. 4.2.7.1 Discussion on Policy Determinants Perceptions The role of policy determinants in attracting investment is clear from the results. Figure 4-8 shows that Japanese MNCs regard the proactive role of Government in attracting FDI as a basic expectation, along with high-quality institutional standards. This finding is in line with expectations as Rios- Morales & O'Donovan (2006) argue that governments require a holistic approach to reduce barriers to foreign investors and provide incentives alongside more long-term development goals. A study by Mody et al. (1998) found that for Japanese firms in particular, that government restrictions on foreign ownership are strongly resented by Japanese investors and enforced export rules are a major disincentive. The respondents to this survey appear to agree and regard openness to trade as a necessary determinant for foreign investment. 0% 10% 20% 30% 40% 50% 60% 70% Top 5 FDI Determinants by Aggregate Importance
  • 54. 47 Figure 4-8: Role of Policy Determinants (Group 2) Previous research has failed to reach consensus on the impact of political instability and risk on foreign investment. Studies by Singh & Jun (1995), Blonigen (2005), Mauro (1997) and Cieslik & Ryan (2004) found that political risk is a deterrent to FDI. In this study, Political Stability is perceived as a one- dimensional feature of FDI by the respondents meaning there is a direct correlation between level of political stability and the MNCs positive perception of the country. Thus, this study agrees with the work of the aforementioned authors. It contrasts however with the findings of Wheeler and Mody (1992) who found that although geo-political risk was significant, domestic socio-political risk is assigned little importance. The contrast in results may reflect the difficulty in measuring perceived risk and the differing proxy indicators used to determine risk levels (Lim, 2001, p. 16). The final aspect of political determinants of FDI is the industrial standards. This refers to the promotion of high quality industrial policies, which drive specialised knowledge clusters in Ireland. This study shows that industrial development is seen as an attractive feature of FDI. This means that it may not be an initial consideration for foreign investors from Japanese MNCs but any improvements in industrial development will be seen as a delightful aspect of the country. This finding agrees with a study by Dimitropoulou, et al. (2007) and UNCTAD (2010) which argued that the quality of government policy on industrial development aimed at creating areas of regional specialisation is crucial, as these regions are positively associated with FDI. However, this study fails to determine the reason why industrial development is seen as an attractive feature of FDI and thus it is not possible to confirm the “herd behaviour” of following competitors is a contributory factor (Kinoshita & Mody, 1997)
  • 55. 48 4.2.7.2 Discussion on Economic Determinants Perceptions The decision to invest in Ireland by Japanese MNCs is highly dependent on economic factors. The results from the survey on the economic determinants of FDI in Figure 4-9 highlight that the economic climate in Ireland is perceived to affect the foreign investment decision in different ways. Figure 4-9: Economic Determinants of FDI The FDI feature of local capital with a Kano category of Must-Be refers to the expectation that access to local capital markets within a stable banking system is provided. A report by UNCTAD (2008) highlighted that for western countries including the EU-15, a stable banking system is crucial for investment. Other studies also point out that a functioning banking system is a significant determinant of FDI and that enables local businesses to interact with MNCs is vital for investment purposes (UNCTAD, 2011; Piteli, 2010). Based on Berger et al. (1993) interpretation, Must-Be features are the most important and therefore, this study agrees with the prior research. The one-dimensional or performance FDI features are all viewed to be contributory factors for FDI investment. The FDI features with the highest category response include Skills (62%), Productivity (54%), Regional Market (62%), corruption (54%) and macroeconomic (54%). Foreign MNCs in Ireland employ higher proportions of skilled labour than industry on average (Barry & Bradley, 1997) and this correlates with the results of this survey. Japanese MNCs perceive the skilled workforce as a crucial economic determinant of FDI in Ireland and this agrees with the work of Schneider & Frey (1985), Borensztein, et al. (1998) and Noorbakhsh, et al. (2001) who found that access
  • 56. 49 to high skilled labour is a significant determinant of a nation’s location advantage and is important in attracting FDI. Closely related is the productivity of workers and Ireland has traditionally been viewed favourably for its labour quality and productivity (Gunnigle & McGuire, 2001; IDA Ireland, 2011; Hewitt-Dundas, et al., 2010). In addition, Gilmore et al. (2003) found that the availability of a skilled workforce was significantly more important in FDI decisions than low-cost labour. This study is in agreement with Gilmore et al., as productivity has a high one-dimensional score and labour cost is viewed as a lower priority attractive feature. Moreover, the results suggest that high labour costs are accepted by Japanese MNCs investing in Ireland but reductions in those costs would be very attractive for further FDI. Thus, this echoes the study by Gunnigle & McGuire (2001) that labour cost is not seen as a critical factor in MNC investment in Ireland. 4.2.7.3 Discussion on Business Facilitation Determinants The business environment within a host country has significant influence on investment decisions. The location-specific FDI factors for enabling a business to operate effectively are shown in Figure 4-10 with the Kano categories. Figure 4-10: Business Facilitation Determinants of FDI - Results The managers in Japanese MNCs perceive a well-developed investment promotion framework and a robust legal system as expected requirement for investment. Morisset (2003, p. 18) argues that promotion agencies with aggressive FDI campaigns positively influence FDI decisions, particularly where the country has a good overall investment climate. Similarly, the World Bank (1997) finds that promotion only succeeds when the country is attractive to investors. This is interesting as Must-Be features will not increase investor satisfaction with further improvements but increase dissatisfaction if absent.
  • 57. 50 Thus, investment promotion is a must-have but not sufficient for investment and the survey agrees with the earlier research. FDI features that can deliver satisfaction for foreign investors are one- dimensional FDI features of improvements in workforce education (54%), improvements to quality of life (46%) and streamlining of red tape (54%). There is a consensus that countries that invest in improving quality of life attract more FDI (Globerman & Shapiro, 2004; Peterson, et al., 1999; Schneider & Frey, 1985). This study on Japanese MNCs appears to agree with the work of Gunnigle & McGuire (2001) on US MNCs invest in Ireland, locating in Dublin for quality of life reasons. The importance of low levels of bureaucracy and red tape are also highlighted in the results. These find agreement with studies by Kobrin (1979) and Kinoshita & Campos (2002) who found that the degree of red tape and corruption was an important factor in investment. For Japanese MNCs, improving the bureaucracy of doing business will result in increased satisfaction. Lastly, the prior knowledge of Ireland and the previous investment or presence in the country is perceived as indifferent. This is the lowest Kano category and suggests that Japanese MNCs attach little significance to this FDI factor. This result is in stark contrast to findings by Mody et al. (1998) who found that previous presence in the host country increased investment by Japanese MNCs in Asia and findings by Cieslik and Ryan (2004) regarding Japanese investment into Europe. The reason for such a contrast is uncertain, however it may be the importance of such prior information is not seen as relevant until an investment is in progress and during the survey the need for such knowledge is not perceived as a major concern.
  • 58. 51 4.3 Findings from Interviews Data was collected from five interviews, all conducted within Fujitsu. Each interview commenced with reference to the pre-briefing material supplied (See Appendix II: Interview Format) and the right to privacy of the individual submissions by each interviewee. All interviewees were happy to share their names as shown in Table 4-4. Name (Optional) Nationality Company Name Job Title Time with Company (Years) Member of Management (Yes/No) Regina Moran Irish Fujitsu Ireland CEO 26 Yes Anthony McCauley Irish Fujitsu Ireland Head of Innovation 14 No Collette McMullan Irish Fujitsu Ireland Legal and Commercial Director 6 Yes Louise Brady Irish Fujitsu Ireland Marketing Manager 5.5 Yes Ken Ashida Japanese Fujitsu Director, Strategic Planning 27 No Table 4-4: Details of Interviews The questions in the interviews were based on the themes from the literature and the categories in the conceptual framework. In general, the same questions were posed to each interview, however in some interviews related topics arose which were explored using probing techniques (Saunders, et al., 2009, p. 338). The findings from the interviews are presented using the three broad themes from the literature. 4.3.1 Perceptions of Policy Determinants Irish Government policy towards Asia in general and Japan in particular needs greater development. There was consensus that although Ireland has been an attractive base for FDI by US MNCs, a new approach is required to attract foreign investment from Japan. Role of the Government and Institutions Government policy elicited varied opinions across the interview subjects, from praise to criticism and apathy. The continued effort of the Government to maintain high levels of investment in R&D was praised by Regina Moran, CEO of Fujitsu Ireland. Given the current economic climate, this government position on R&D spend was viewed positively by Fujitsu Japan and it helped reduce the perceived risks with the investment. However, there was a
  • 59. 52 perception that intergovernmental communication between Ireland and Japan was lacking and stronger connections need to be created. “I haven’t seen that much interaction [in] government term[s] [at] the political level between the two countries” (Regina Moran, CEO of Fujitsu Ireland) The focus on China was noted but it was felt that Ireland and Japan have more common ground politically than between Ireland and China. While previous trade missions to Japan were successful, Ireland’s products and services are not widely known in Japan. The respondents argued that government policy is not enough and extensive promotion is required. Although IDA Ireland was viewed as providing a great service in Ireland, there was some criticism of the institutions promotional activities with only two dedicated staff in Japan. “Two versus 128 million is not a great batting average really, so we don’t have a lot of promotion of Ireland on the ground in Japan” (Regina Moran, CEO of Fujitsu Ireland) This lack of knowledge means that more effort is required to build awareness of Ireland in Japan and to approach it differently than would be undertaken for US MNCs. The lack of diaspora and common cultural linkages was also noted and that building relationships between the countries is a different prospect to attracting US investment. Prioritisation of Government Policy In relation to the role of the Irish government, a number of issues were pointed out. There is a need for prioritisation of the research and development agenda within Ireland to ensure that as a location, Ireland becomes recognised as world class in certain areas. “I think you’ve got to pick four or five areas and say, this is what Ireland’s going to be known for… I firmly believe if you have that, then you’re going to put Ireland on the map” (Anthony McCauley, Head of Innovation, Fujitsu)
  • 60. 53 In addition, there was a view from some interviewees that attracting Japanese manufacturing to Ireland will be increasingly difficult due to Ireland’s cost base and the fact Ireland is competing with China, a low-cost location on Japan’s doorstep. The general theme from the interviews is that Ireland must focus on higher value tasks and as Regina Moran noted “move up the food chain now in terms of value creation” to attract foreign investment from Japan. Another issue raised was that of immigration and the difficulty for Japanese investors to travel to Ireland. One interviewee noted that for highly important and busy business trips the length of time waiting at immigration in Dublin Airport was not an attractive feature. Alignment of Supply and Demand The respondents highlighted the need for alignment of supply and demand in order to attract new high-technology foreign investment from Japan. The concept of alignment had many aspects during the interview discussions. First, Fujitsu Japan was looking for unique world-class research that could not be found elsewhere in the world. Fujitsu, as a Japanese MNC has a demand for unique knowledge that can be commercialised throughout the world and Ireland was able to supply that unique information as it was aligned to their needs. “the key driver is really the availability of opportunities to do leading edge research with some of the research institutions in Ireland. There was a real match between [what] Fujitsu is looking at in Japan and what’s actually going on here. It's very much driven by the fact that that capability exists here.” (Collette McMullen, Legal and Commercial Director, Fujitsu) “In short it's the capability that was a good match with what the organization was looking for from our side” (Ken Ashida, Director, Strategic Planning, Fujitsu) Second, the national innovation system needs to forge closer links internally within Ireland. The need for alignment between universities and research groups in Ireland was highlighted with the need to develop university
  • 61. 54 curriculums in line with the needs of indigenous research and ultimately Japanese MNCs. Furthermore, the educational sector must provide education that is fit for purpose to develop higher quality graduates. However, a word of caution was issued by Anthony McCauley, Head of Innovation in Fujitsu who pointed out that continual alignment with commercial applications may become stifling and there is a need for balance as “researchers have got to just research new ideas, because that’s how you create markets”. Tax and Fiscal Policies The opinion among respondents as to the importance of the fiscal policies was varied. The corporation tax rate was viewed as more significant for US MNCs investing in Ireland and potentially being a secondary concern for FDI from Japanese MNCs. However, the incentives and credits offered by the IDA and Science Foundation Ireland (SFI) for the investment by Fujitsu was lauded and seen as “very supportive” and “extremely generous”. Fujitsu’s legal and commercial director viewed the tax credits for the investment as a key factor for the investment. On the other hand, Fujitsu’s Head of Innovation highlighted that the world-class leading edge research was the primary attraction and while tax incentives were part of the package, there was certain uneasiness with these grants from a Japanese perspective. “What was more important to them was that they were coming here and they coming to a world class destination. That they were going to deal with the best. The grants and all that were not as important … Actually, they didn’t feel comfortable about governments giving them grants. They weren’t easy with that.” (Anthony McCauley, Head of Innovation, Fujitsu) Respondents also remarked on the increasing competition from other countries in Europe in terms of fiscal policies. There was some concern that other neighbouring countries such as Northern Ireland, Scotland and Wales had become increasingly competitive and Ireland policy makers must ensure we do not fall behind with fiscal policies for foreign investment.
  • 62. 55 4.3.1.1 Discussion on Policy Determinants Perceptions An interesting concept raised in the interviews was that of inter-governmental communication and the role it plays in raising awareness. There was some criticism of the level of promotion by the Irish government in Japan and mixed views on IDA Ireland’s focus on attracting Japanese investment. This finding is aligned with the findings of Rios-Morales & O'Donovan (2006) who argue that governments require a holistic approach to reduce barriers to foreign investors however this is more specific. Inter-Government communication to build relationships and awareness is an important determinant in attracting FDI from Japan. This foreign investment by Fujitsu Japan in R&D collaboration in Ireland highlighted another key concern. Prioritisation and alignment of government policies to drive the national innovation system is required to attract Japanese FDI but room must be given for the spirit of innovation to create new markets to attract future investment, as visualised in Figure 4-11. Figure 4-11: Alignment of Policies with needs of Japanese MNCs This is in broad agreement with prior research on the need for quality industrial development policies (Dimitropoulou, et al., 2007), high-skilled labour (Borensztein, et al., 1998; Noorbakhsh, et al., 2001) and government policies for demand-driven strategies in education, R&D and human capital accumulation (Miyamoto, 2003; Saggi, 2002). This research indicates a new dimension however as alignment with commercial needs cannot be exclusively followed, non-aligned freethinking is needed to create “new markets” and increase the attractiveness of Ireland.
  • 63. 56 4.3.2 Perceptions of Economic Determinants Economic Stability A number of respondents referred to the current economic climate in Ireland and its impact on the FDI by Fujitsu. The Irish bailout was not seen in a positive light and it did tarnish the image of Ireland in Fujitsu Japan. However, after the initial engagement, perceptions changed as there was a realisation that life goes on and the Irish economy was still functioning well. There was recognition of how Ireland was handling the debt crisis and the hard decisions being made to regain economic stability. “I don’t think [the economic recession] had any major influence on the decision-making process” (Ken Ashida, Director, Strategic Planning, Fujitsu) The same sentiment was noted of the Irish banking crises and the lack of access to local funding had no impact as Fujitsu had significant funds for R&D investment. Access to Regional Market Ireland’s position as a member of the European Union has long been publicised as an attractive feature for foreign investors. Regina Moran, Fujitsu’s CEO, pointed out that Ireland and Japan can act as gateways to Europe/US and Asia respectively, and developing strong bonds could be mutually beneficial to both countries. Furthermore, Fujitsu’s Marketing Manager, Louise Brady noted that Ireland’s strategic location in Europe and its strong ties with the US place it “at the heart of the trading world”. This was echoed by Fujitsu’s CEO :”Ireland has got a competitive advantage there in being very much a part of Europe still … that is a huge factor and having … access to America”. Skilled Labour and Knowledge Ireland continues to produce high quality skilled labour and delivers unique knowledge capabilities. Feedback from the interviews continually brought up the theme of the world class nature and unique quality of the knowledge in Ireland. “We were looking for unique research that Japan could not get anywhere else that was world class”
  • 64. 57 (Anthony McCauley, Head of Innovation, Fujitsu) A unique attraction in Irish research institutes is an oxymoron. The lack of purely Irish-born and Irish-based researchers is a distinct attraction for Ireland. As a small open economy, Ireland has sourced researchers and knowledge outside its borders in an approach akin to open innovation (Chesbrough, 2003). This has resulted in a unique and eclectic international mix of people and knowledge that increases Ireland’s innovative capacity and attraction to Fujitsu. “they were impressed with was the international mix of the research institutes. The age, yes, they were young. They were very confident, but the international mix, that’s what they were looking for. They’re not looking for purely Irish based-research full of our researchers” (Anthony McCauley, Head of Innovation, Fujitsu) However, given Ireland’s high unemployment, some fear was expressed that Ireland’s immigration policies should not restrict the flow of knowledge and people into the country, which can provide unique competitive advantage. When referring to the Fujitsu investment in research collaboration with the Digital Enterprise Research Institute (DERI) in Galway, it was clear the quality of the people working in Ireland is a key attraction. “DERI would be seen and this is something that Ireland needs to be very cognizant of … as world class… when [the Japanese] come here, they take pictures with Stephen Decker, because he is seen as, he’d be like a film star in the area of linked data. That’s why they’re attracted to Ireland.” (Anthony McCauley, Head of Innovation, Fujitsu) The work of IDA Ireland in attracting world class figures like Stephen Decker is applauded by respondents, as such leading researchers and consolidated research centres are very attractive to Japanese investors. Another unique proposition for Ireland is the access afforded to MNCs by the top researchers. The accessibility of such researchers is seen as a key attraction for Fujitsu, which would not be available to Fujitsu in larger countries with larger research institutes.
  • 65. 58 Furthermore, the quality of the labour skills is also demonstrated by the fact that this investment by Fujitsu is one of the first in the world where Japan collaborated on research rather than subcontract it. The openness, flexibility and ease of working within Irish institutes is unique and an attractive feature for Fujitsu. “our researchers have done very in-depth analysis of the capability and they're very happy about it. It was all positive I would say” (Ken Ashida, Director, Strategic Planning, Fujitsu Japan) Operational Costs Although the operational and labour costs are a consideration for all investments, they did not feature high on the list of priorities for Fujitsu. Ireland’s competitiveness is viewed as improving due to the recession and reducing labour costs although some fear is expressed about the return of high labour costs, which would erode Ireland’s competitiveness. Although the operational cost base remains high in terms of energy and utilities, this was not seen as an important factor for the investment. “That was very much led by the research opportunity and the innovation that exists rather than cost of labour”. (Collette McMullen, Legal and Commercial Director, Fujitsu) Industrial Knowledge Clusters A number of respondents highlighted the importance of industrial clusters as an attractive feature for investment in Ireland. The work of Science Foundation Ireland, IDA Ireland and Enterprise Ireland were extoled for the creation of competency centres where the focus is on excellence in research. These knowledge clusters enable many leading edge researchers to work together and produce world class knowledge. When discussing the TRIL (Technology Research for Independent Living) research centre, Ireland’s small physical size and the relative proximity of competency centres was also viewed as a unique attractive feature for investment by Japan. “What attracted them there is again you have a number of research institutes working together. The one thing that Ireland has going for it is its small. These groups can work together, because the island of Ireland is small, so you
  • 66. 59 have three research groups in the healthcare area. It gives them a very unique combination, something that they could not get in the US. They could not get in Japan. They couldn’t get in China.” (Anthony McCauley, Head of Innovation, Fujitsu) In TRIL, the diversity of knowledge and disciplines working on research is unique. Clinicians, doctors, nurses, physiotherapists, and psychiatrists work in Dundalk in a living smart environment. This is backed by the unique environments that will add value for Japan as a culture when research outputs are delivered. 4.3.2.1 Discussion on Economic Determinants Perceptions Ireland’s economic crisis has received much attention nationally and internationally in recent years. Fujitsu Japan did not see the bailout in a positive light but they were attracted by other factors such as the quality of skills, research and innovation. This research concurs with other studies on Ireland, which found that the size of the domestic market is of little significance to foreign investors who primarily locate in Ireland to export (Barry & Bradley, 1997; O'Connor, 2001). However, this conflicts with other studies which found that the growth of the domestic economy (Groh & Wich, 2009; Wheeler & Mody, 1992; Singh & Jun, 1995) and the host country’s market size (Torrisi, et al., 2008) were crucial for FDI investment. This contrast may be explained by the R&D collaboration by Fujitsu Japan is not reliant on the domestic market (UNCTAD, 2005). This finding is also echoed in the survey results and the “constellations of importance” that highlight that quality people and skills are more significant than economic concerns. Thus, this finding highlights that where perceived benefits in investment are high, then perceived economic risks are reduced as determinants of FDI. This compensatory effect may be worthy of further research. More important than the domestic market is access to a large regional market place (Lim, 2001; UNCTAD, 2010; Cheng & Kwan, 2000). The respondents in the case study agreed that access to Europe and to the US is part of Ireland’s unique competitive advantage. The case highlights that commercialisation of new research undertaken in Ireland can have applications in regional and
  • 67. 60 global markets and the creation of knowledge has fewer borders. The survey results agree and regional market access is significantly more important than the Irish domestic market. IDA Ireland has focused on attracting FDI to Ireland by establishing world- class research and innovation base through MNCs and research institutes. This policy is working as Fujitsu Japan was attracted by the “world-class” people and research. This agrees with studies by Schneider & Frey (1985), Borensztein, et al. (1998) and Noorbakhsh, et al. (2001) which found that the access to high skilled labour is a significant in attracting FDI. As mentioned previously, the cost of labour was not a significant factor for investment and high skills was more important. Further, a unique insight was proffered in the Fujitsu case study. Part of Ireland’s attraction to investment from Japan was oddly its lack of Irish-ness. The unique, eclectic mix of international talent in a diverse multidisciplinary multicultural research environment excited Fujitsu Japan and created new opportunity not present in the largely homogenous Japanese innovation base. This result is confirmed by the questionnaire results and the high importance of the “people quality constellation”. Thus, Ireland’s open borders policy and the work of the IDA in attracting leading talent means Ireland is a cauldron of innovation and skills that is attractive to Japan. Most interestingly, a concept not discovered in the literature review is that of the side effects of country size on FDI attraction. The interviews highlighted that Ireland’s small size means that there is physical proximity between research institutes, increased collaboration between institutes, smaller and more focused research institutes and easier access to the world-class researchers. In addition, Fujitsu Japan found that openness, ease of working with and the research flexibility of the Irish institutes as a uniquely attractive feature. By meeting top researchers, the “film stars” of research, Fujitsu Japan found a unique capability in Ireland not found in larger countries, a captive audience with the worlds brightest and best.
  • 68. 61 Several studies have found that FDI increases with low-cost labour in the host country (Barrell & Pain, 1996; Cheng & Kwan, 2000; Kinoshita & Mody, 1997; UNCTAD, 2008). However, this study offers a divergent view and found that the cost base in Ireland was not viewed as a salient factor in the FDI investment by Fujitsu Japan. This complements research which found that productivity (Groh & Wich, 2009; UNCTAD, 2011) and availability of a skilled labour force (Gilmore, et al., 2003) was more important than low-cost labour. This also confirms the study by Gunnigle & McGuire (2001) that labour cost is not seen as a critical factor in MNC investment in Ireland. 4.3.3 Perceptions of Business Enablement Determinants Business Conditions Business conditions in Ireland have recovered significantly since the economic recession occurred. Interviewees generally believed that competitiveness had improved due to reductions in labour costs but cautioned against any erosion to this current competitiveness. The views on establishing the foreign investment in Ireland received mixed feedback in terms of bureaucracy and red tape. Ken Ashida, Director, Strategic Planning from Fujitsu Japan noted, “We did not feel that there was a bureaucratic side of it that was making an impact on the project”. This view was endorsed by others who found that the level of bureaucracy was warranted and Ireland was not considered a difficult place to do business. “[Fujitsu] are a big multinational and they're expecting to do things properly and execute proper agreements. There's definitely no perception that Ireland is bureaucratic or difficult to do business in at all” (Collette McMullen, Legal and Commercial Director, Fujitsu) One respondent praised IDA Ireland for being helpful and facilitative during the foreign investment process. However, some difficulties were experienced with the foreign investment in the collaborative research by Fujitsu. The absence of a single point of coordination increased the level of bureaucracy and impacted the investment. Finding the right approach was seen as more by luck
  • 69. 62 than design and the wrong moves could have been costly but were ultimately resolved. Legal Due to the collaborative research focus of the investment by Fujitsu Japan, the legal aspects of securing intellectual property right (IPR) were seen as imperative. From a corporate perspective IPR is crucial to the commercialisation of the research but this had to be balanced with the researchers need to publish articles in academic papers. Feedback from respondents highlighted that both parties had to get something from the collaboration and the legal hurdles were not difficult to overcome. Quality of life The topic of quality of life received limited attention during the interviews but several respondents mentioned the openness of the people as an attractive feature for investment in Ireland. During the discovery phase, before investment, the openness and flexibility of people was a key attractor. “[W]e’ve had ten different researchers here, and of the ten of them, seven said they would move to Ireland tomorrow and live here. They’ve been very impressed with Ireland, they love the people” (Anthony McCauley, Head of Innovation, Fujitsu) Thus, the quality of life offered in Ireland was seen as extremely attractive by Fujitsu personnel from Japan and added to the overall attractiveness of the investment proposition in Ireland. Educated Workforce The educational level of the workforce was generally perceived as positive by the interviewees. However, there were some concerns expressed about the ranking of Irish Universities on an international scale making the promotion of those institutions more difficult. “They deal with MIT Sloan and Stanford and with people at that level. Oxford. Our universities like Dublin City University wouldn’t roll off the tongue” (Regina Moran, CEO, Fujitsu)
  • 70. 63 However, although the institutions were perceived as having world class knowledge, the quality of top level Irish graduates was questioned. There is a need for more focused curriculums and greater travel abroad to develop world class skills that can be repatriated to Ireland. “In terms of the educational level, that is a challenge for Ireland. At the moment, our PhDs would not be seen as strong as European PhDs … talking to people from the research institutes when they’re doing interviews, they’re a little bit disappointed that Irish students, research students, are not traveling as well as they should. ” (Anthony McCauley, Head of Innovation, Fujitsu) Previous Knowledge of Location For Fujitsu, the foreign investment is likely not to have occurred but for the previous experience in Ireland due to the presence of its subsidiary, Fujitsu Ireland. Local management provided the information to Fujitsu Japan and promoted the quality of the research being done in Ireland. There was also significant effort in ensuring that all aspects of the collaborative investment were well planned to remove any risk associated with the investment. Thus, the role of the subsidiary is a significant determinant in attracting FDI from Fujitsu Japan. “Unless this had been driven from Ireland, I don’t think Fujitsu Japan would have come and looked at Ireland” (Collette McMullen, Legal and Commercial Director, Fujitsu) This drive from Ireland to attract FDI from Japan actually changed Japanese perceptions of Ireland. This change of perception is vital for future attraction and is again a key factor in FDI investment by Fujitsu Japan. “I had a very limited knowledge, which just turned out to be rather negative. My previous knowledge [went from] negative … to positive as the outcome of the decision for doing this joint research” (Ken Ashida, Director, Strategic Planning, Fujitsu Japan) Culture Opinions on the effect of cultural differences between Ireland and Japan were varied across respondents. There was an understanding by some respondents
  • 71. 64 that the Japanese work differently to the Irish and have different ways of doing business. The building of relationships between the two cultures was noted as a significant difference to working with US MNCs where the shared cultural heritage makes working together easier. “What way to behave and the gift-giving, the respect, the learning of Japanese. We reached out because we realised that there was a bridge that had to be built between the two cultures as well as the two countries … [You] don’t have all of that when you’re dealing with an American foreign direct investment” (Regina Moran, CEO, Fujitsu) However, another respondent believed that research by its very nature is less impacted by the cultural differences. The use of scientific language allows a different form of communication to occur that overcomes many of the normal cultural barriers. This insight may prove valuable in attracting other investments from Japan in R&D based investments. There is also some sense that the cultural differences, where they exist, can be overcome through shared challenges such as being Island nations and a shared sense of enjoying life. 4.3.3.1 Discussion of Business Enablement Determinants The business environment within a host country has significant influence on investment decisions. Business facilitation includes post-investment services, legal facilitation, improvements in amenities and reduction in ‘red tape’ (UNCTAD, 1998). From the point of view of bureaucracy and “red tape” this study found that Ireland’s approach was not overly bureaucratic and was not viewed as a deterrent for FDI. The perceptions were muted and respondents suggested that some bureaucracy was expected. While some studies have found that reduction in hassle costs increases FDI flows (Li & Clarke-Hill, 2004; UNCTAD, 2011) and that the degree of red tape was an important factor in investment (Kobrin, 1979; Kinoshita & Campos, 2002), this is not evident in this case study. Thus, this finding contradicts the survey results and it may be explained by different levels of bureaucracy across various sectors surveyed.
  • 72. 65 Quality of life in Ireland was seen as an attractive feature by Fujitsu Japan. With 70% of the Japanese researchers who visited Ireland expressing an interest in moving to Ireland, this endorsement can only be seen as positive for further FDI. This study found that the cultural and language barriers, although significant, could be overcome with the appropriate focus in government policies and education. While Hornberger et al. (2011) found that quality of life and language skills were one of the top ten determinants for foreign firms investing in developing and transition economies, the results of this study show that it is less significant. The survey also agrees in that improvements in quality of life will increase satisfaction for Japanese investors. Mody et al. (1998) and Cieslik and Ryan (2004) studies point out that Japanese FDI increases with previous presence in the host country. This study finds mixed views in the interview responses. The respondents felt that the Irish subsidiary of Fujitsu was crucial to investment and the respondent from Fujitsu Japan had his perceptions of Ireland changed during the process. This points to the credibility of information from previous investments (Kinoshita & Mody, 1997) and the importance of previous knowledge of Ireland for investment. However, the survey found 54% of the respondents indifferent to previous knowledge and the author speculates that more than other nationalities, Japanese MNCs will take the time to gather necessary information before any investment and this shortcoming can be overcome. 4.3.4 Encouraging Further Japanese Investment Given the perceived locational determinants for FDI in Ireland, what can Ireland do to encourage greater investment from Japan? This question was posed to each interviewee and a variety of opinions was provided with some commonality between responses. There was consensus on the need for Ireland to change to meet the needs of Japan. The cultural differences, language differences and different approach to business mean that Ireland cannot trade on its heritage, as with US MNCs, but must adapt the marketing effort to attract more investment. The risk-averse nature of Japanese companies means that more time is required and this is a change from the western approach. However, Japanese firms will commit for longer periods once they are embedded.
  • 73. 66 Several respondents called for greater alignment of government agencies so that they understand the Japanese culture and prioritise R&D research in Ireland to be attractive to Japan and Japanese MNCs. There is a need for a coordinated approach to ensure that the quality of R&D is world class because that is what Japan is seeking. From a government policy perspective, there must be an understanding the Japan can become a gateway to Asia and Asian market is significantly larger than the US market. Transportation that is more direct is required between the two countries and the education system needs to provide more Japanese language courses. In addition, those Irish with Japanese language skills need to be utilised to provide greater competitive advantage for Ireland. Finally, there must be a will to focus on Japan and build Ireland’s reputation to attract further investment. By creating binds between the two nations, further continued investment will be made possible.
  • 74. 67 5 Conclusions 5.1 Introduction Ireland has been and continues to be successful in attracting foreign direct investment from the world’s leading multinational corporations (IDA Ireland, 2011); however, the overreliance on a single source for that investment, the US, is a cause for concern (Forfás, 2009). There has been a renewed focus on Asia to draw further investment from that growing region (IDA, 2010b) but to date the level of investment from Japan has been limited. To redress this balance a different approach is needed to build bridges between Ireland and Japan and build mutually beneficial relationships. This research examined the location-specific determinants for foreign investment in Ireland, which formed the primary research question. This study investigated three research questions. The two secondary research questions: SQ 1. What are the perceptions of managers in Japanese MNCs as to the key factors in investing in Ireland: the role of policy determinants, economic determinants and business facilitation determinants? SQ 2. Given the perceived locational determinants for FDI in Ireland, what can Ireland do to encourage greater investment from Japan? The answers to these questions will ultimately contribute to answering the primary research question for this study. PQ 1. What are the location-specific factors that influence the decision by Japanese MNCs to invest in Ireland? Although focusing on FDI in general in Ireland, specific focus was given to the location-specific determinants of FDI as elucidated from the literature. Furthermore, the research attempted to uncover the factors specific to Japanese MNCs as there was a lack of prior study on Japanese investment determinants particularly in Ireland. The literature on US MNCs was used to allow similarities and contrasts to be developed and to highlight the important policy
  • 75. 68 implications for Ireland to improve its under-performance in attracting FDI from Japan. 5.2 Secondary Research Questions 5.2.1 Secondary Research Question One The study sought to answer two secondary research questions. The first was: SQ 1. What are the perceptions of managers in Japanese MNCs as to the key factors in investing in Ireland: the role of policy determinants, economic determinants and business facilitation determinants? In answering this question, the author developed a multi-method study using interviews and questionnaires to gather perceptions qualitatively and quantitatively. In the case study interviews, the perceptions of managers were gathered in an open explorative series of questions. On the other hand, the questionnaire used Kano questions and sought perceptions of positive improvements and negative deteriorations in each of 23 FDI determinants. In addition, importance perceptions were sought for each FDI determinant and a top-five ranking was employed. Japanese MNCs perceive the role of policy, economic and business facilitation determinants to be interconnected. A common theme throughout the interviews was the relatedness of policy decisions to economic, fiscal and business stability. The case study found that government policy to promote Ireland in Japan, prioritisation and alignment of development objectives and the creation of a cauldron of skilled people is crucial to attracting Japanese investment. In this case Fujitsu Japan was attracted by Fujitsu Ireland and IDA Ireland working together to align the best of Irish research with the needs of Fujitsu Japan. With the initial engagement underway, Fujitsu Japan was drawn to invest in Ireland because of its unique blend of world-class research. The survey results were generally in agreement with the case study research. Required (Must-Be) FDI features for investment by those Japanese MNCs surveyed included the role of Government (46%) in policy determinants, access to local capital (46%) in economic determinants and investment
  • 76. 69 promotion (31%) in business facilitation determinants. However, the top-five FDI features voted by the survey respondents highlighted some differences. Over 50% of respondents voted People Skills in the top-five while almost 40% selected the proactive role of Government as important in attracting Japanese FDI. In addition, taxation was vote by over 60% of respondents as the most critical requirement along with political stability (almost 50%) and access to regional markets (almost 40%). Thus the role of government in driving economic and business facilitation features is crucial to attracting Japanese MNCs to Ireland. Figure 5-1: Top-Five FDI Factors Furthermore, using “self-stated-importance” questions in the questionnaire the perceptions of the key factors for investing in Ireland were gathered. The author argues that the key factors for investment by Japanese MNCs are more complex than a simple ranking would suggest. The author instead proposes the concept of “constellation factors” of FDI by Japanese firms. These are groups of factors allocated high importance in the survey as well as being given satisfaction and dissatisfaction Kano ratings. These four important constellations of (1) People Quality Triangle, (2) Risk Spire, (3) Government web and (4) Industrial Development Circle closely correlate with the earlier case study and survey outputs.
  • 77. 70 Figure 5-2: Constellation Factors for FDI Significantly, analysis of the semi-structured interviews revealed other factors that played a significant role in the attraction of Japanese MNCs to Ireland for R&D collaboration: FDI Factors Description Open Innovation in Research Institutes Open Innovation in Research Institutes refers to the concept proposed by Chesbrough (2003) where knowledge and ideas flow into and out of an entity in an open approach to innovation. The case study shows that collaboration between various Irish research institutes provided a unique location for leading edge open research not available to Japanese investors anywhere else in the world. People Diversity People diversity is a unique point for Irish research that differs to that available in Japan. The diversity of world-class skilled resources in Irish research institutes means that Ireland is a cauldron of innovative activity of the highest calibre. It is unique in its lack if Irish-ness. While Japan has advanced research, the homogeneity of the researchers may be seen to
  • 78. 71 limit the innovative capability and thus Ireland may provide a complementary service to Japan. Smaller is Better Smaller is better refers firstly to Ireland’s small physical size. For Japanese MNC investors the physical proximity between research institutes is attractive as more collaborative research is possible and specialised research is necessary in smaller institutes. Furthermore, smaller institutes means less hierarchy and more easy access to the interact with world-class researchers, something not available in other countries. Figure 5-3: Unique FDI Factors from Fujitsu Case Study These factors were not evident from the academic literature but were viewed as important in the case study. While the scope of this case study in limited in its generalizability, the unique findings offer opportunities for other research to understand its wider implications. 5.2.2 Secondary Research Question Two The second research question asked: SQ 2. Given the perceived locational determinants for FDI in Ireland, what can Ireland do to encourage greater investment from Japan? This question was posed to each interviewee and a variety of opinions was provided with some commonality between responses. There was consensus on the need for Ireland to change to meet the needs of Japan. The cultural differences, language differences and different approach to business mean that Ireland cannot trade on its heritage, as with US MNCs, but must adapt the marketing effort to attract more investment. The risk-averse nature of Japanese companies means that more time is required and this is a change from the western approach. However, Japanese firms will commit for longer periods once they are embedded. Several respondents called for greater alignment of government agencies so that they understand the Japanese culture and prioritise R&D research in Ireland to be attractive to Japan and Japanese MNCs. There is a need for a
  • 79. 72 coordinated approach to ensure that the quality of R&D is world class because that is what Japan is seeking. From a government policy perspective, there must be an understanding the Japan can become a gateway to Asia and the Asian market is significantly larger than the US market. Transportation that is more direct is required between the two countries and the education system needs to provide more Japanese language courses. In addition, those Irish with Japanese language skills need to be utilised to provide greater competitive advantage for Ireland. Finally, there must be a will to focus on Japan and build Ireland’s reputation to attract further investment. By creating binds between the two nations, further continued investment will be made possible. 5.3 Primary Research Question The answers to these questions will ultimately contribute to answering the primary research question for this study. PQ 1. What are the location-specific factors that influence the decision by Japanese MNCs to invest in Ireland? Following in-depth deliberation of the relevant literature and analysis of the findings from the case study interviews and online questionnaire, the author proposes the following as being the salient location-specific factors that influence the decision by Japanese MNCs to invest in Ireland. 1. Productivity, Skills and Educated Workforce 2. Legal System and Corruption 3. Openness to trade and access to regional markets 4. Quality Infrastructure, operating costs and taxation 5. Industrial Development Policies It is ultimately the presence and interaction of these FDI determinants within the unique context of the Irish environment, which will place Ireland as a long- term partner for Japanese MNCs and deliver shared success.
  • 80. 73 5.4 Limitations and Further Studies This research is limited in that it uses a single case study and as such, the context within which the results of that case study can be generalised is somewhat limited. Case specific factors such as the nature of the FDI investment, the sector if the company involved and the people involved in the study influenced the analysis and conclusions. Thus, further studies are required to determine if the unique FDI factors highlighted in Figure 5-3 from the analysis is applicable to other FDI investments by Japan in Ireland. Equally, this study could be developed by comparison to case studies of Japanese investment in other countries, particularly small open economies. A second limitation of the research is that the sample for the survey was limited to the relatively small number of Japanese MNCs in Ireland. Although a response rate of over 50% was received from the survey, there are opportunities for broader surveys of Japanese firms internationally. Specifically, Japanese firms who are potentially looking for overseas investment locations could be engaged through IDA Ireland to develop a more generalizable model, particularly for R&D. The use of such studies may also serve to highlight Ireland as a potential location for FDI by those Japanese firms studied. Another limitation is the use of the Kano model for development and analysis of the questionnaire on FDI determinants. The Kano model provides a unique approach to analysis but its use as a tool for FDI determinant analysis is unproven. Online survey mechanisms do not provide automated methods of Kano analysis and thus the research required significant effort to transform the data into workable results. Further research should look to develop the Kano model itself in its applicability to FDI determinant analysis and develop the graphing and calculation standards further. Equally, further studies may examine the potential of using the Kano model as a framework to view FDI determinants and provide new insights on foreign investment decisions.
  • 81. 74 6 References Addison, T. & Hesmati, A., 2003. The new global determinants of FDI flows to developing countries, s.l.: United Nations University. Aggarwal, R., Berrill, J., Hutson, E. & Kearney, C., 2010. What is a multinational corporation? Classifying the degree of firm-level multinationality. International Business Review. Aguinis, H., Pierce, C., Bosco, F. & Muslin, I., 2009. First decade of Organizational Research Methods: Trends in design, measurement, and data- analysis topics. Organizational Research Methods, 12(1), pp. 69-112. Artige, L. & Nicolini, R., 2005. Evidence on the Determinants of FDI. The case of three European Regions, Barcelona: CSIC. Artige, L. & Nicolini, R., 2006. Evidence on the Determinants of Foreign Direct Investment. The Case of Three European Regions, Liege: University of Liege. Baibekova, K. & Hoang, A. N. T., 2010. Determinants of Foreign Direct Investment in Ireland, s.l.: Jonkoping International Business School. Baniak, A., Cukrowski, J. & J., H., 2005. On the Determinants of Foreign Direct Investment in Transition Economies. Problems of Economic Transition, 48(2), pp. 6-28. Barrell, R. & Pain, N., 1996. An Econometric Analysis of U.S. Foreign Direct Investment. The Review of Economics and Statistics, 78(2), pp. 200-207. Barrios, S., Dimelis, S., Louri, H. & Strobl, E., 2002. Efficiency Spillovers from Foreign Direct Investment in the EU Periphery: A Comparitive Study of Greece, Ireland an Spain, s.l.: FEDEA. Barrios, S., Dimelis, S., Louri, H. & Strobl, E., 2005. Efficiency Spillovers from Foreign Direct Investment in the EU Periphery: A Comparative Study of Greece, Ireland, and Spain, Athens: s.n. Barry, F., 1999. Understanding Ireland’s Economic Growth. 1 ed. London: Macmillan Press. Barry, F., 2007. Foreign direct investment and institutional co-evolution in Ireland. Scandinavian Economic History Review, 55(3), pp. 262-288. Barry, F. & Bradley, J., 1997. FDI and Trade: The Irish Host-country experience, Dublin: s.n. Barry, F. & O'Mahony, C., 2006. Making Sense of the Data on Ireland’s Inward FDI, Dublin: UCD School of Economic. Berger, C. et al., 1993. Kano's Method for Understanding Customer-Defined Quality. Centerfor Quality of Management Journal, 2(4), pp. 3-36. Bernard, H. R., 2000. Social Research Methods: Qualitative and Quantitative Approaches. s.l.:Sage Publications. Bhattacharyya, S. K. & Rahman, Z., 2004. Capturing the customer’s voice, the centerpiece of strategy making: A case study in banking,. European Business Review, 16(2), pp. 128-138.
  • 82. 75 Bîrsan, M., Hunya, G. & Siedschlag, I., 2008. Foreign Direct Investment, Economic Growth and Labour Market Performance: Empirical Evidence from the New EU Countries, Napoca: European Studies Foundation. Blomstrom, M., 1986. Foreign Investment and Productivity Efficiency: The Case of Mexico. Journal of Industrial Economics, Volume 15, pp. 97-110. Blomstrom, M., 2001. The economics of international investment incentives, s.l.: OECD. Blomstrom, M., Globerman, S. & Kokko, A., 2000. The Determinants of Host Country Spillovers From Foreign Direct Investment, s.l.: Centre for Economic Policy Research. Blomstrom, M. & Kokko, A., 2003. The economics of foreign direct investment incentives, Cambridge: National Bureau of Economic Research (NBER). Blonigen, B. . A., 2005. A Review of the Empirical Literature on FDI Determinants, Philadelphia: University of Oregon. Blonigen, B. A., 2005. A Review of the Empirical Literature on FDI Determinants, Oregan: University of Oregon and NBER. Blonigen, B. A., 2005a. A Review Of The Empirical Literature On FDI Determinants. Atlantic Economic Journal, Issue 33, pp. 383-403. Blonigen, B. A. & Davies, R. B., 2004. The Effects of Bilateral Tax Treaties on U.S. FDI Activity. International Tax and Public Finance, 11(5), pp. 601-622. Borensztein, E. J., De Gregorio, J. & Lee, J. W., 1998. How Does Foreign Direct Investment Affect Economic Growth. Journal of International Economics, 45(1), pp. 115-135. Borenztein, E., De Gregorio, J. & Lee, J., 1998. How does foreign direct investment affect economic growth. Journal of International Economics, Volume 35, pp. 115 - 135. Bryman, A., 2006. Integrating Qualitative and Quantitative Research: how is it done?. Qualitative Research, Volume 6, pp. 97-113. Cassidy, J., Barry, F. & van Egeraat, C., 2009. Ireland - Industrial Competitiveness in a Small Open Economy, Maynooth: National Institute for Regional and Spatial Analysis. Caves, R. E., 1971. International corporations: The industrial economics of foreign investment. Economist, 38(149), pp. 1-27. Caves, R. E., 1997. Multinational Enterprise and Economic Analysis. 2nd ed. Cambridge: Cambridge University Press. Chakrabarti, A., 2001. The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross-Country Regressions. Kyklos, 54(1), pp. 89-113. Charoenruk, D., 2010. Communication Research Methodologies: Qualitative and Quantitative Methodology, s.l.: Businessx.org. Cheng, L. K. & Kwan, Y. K., 2000. What are the determinants of the location of foreign direct investment? The Chinese experience. Journal of International Economics, 51(1), pp. 379-400.
  • 83. 76 Chesbrough, H. W., 2003. Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press. Christodoulos, P., 1996. Inward Investment: An Overview and Guide to the Literature. London: British Library. CIA, 2012. The World Factbook, s.l.: Central Intelligence Agency. Cieslik, A. & Ryan, M., 2004. Explaining Japanese direct investment flows into an enlarged Europe: A comparison of gravity and economic potential models. Journal of the Japanese and International Economies, 18(1), pp. 12- 37. Coase, R. H., 1937. The Nature of the Firm. Economica, 4(16), pp. 386 - 405. Creswell, J., 1998. Qualitative Inquiry and research design: Choosing among five traditions. Thousand Oaks: Sage Publications. Creswell, J. W. & Plano Clark, V. L., 2007. Designing and conducting mixed methods research. Thousand Oaks, California: Sage. CSO , 2011. Foreign Direct Investment 2010, Dublin: CSO. Cuervo, J. C. & Pheng, L. S., 2003. Significance of location factors for Singapore transnational construction corporations. Engineering, Construction and Architectural Management, 10(5), pp. 342-353. Curran, J. & Blackburn, R. A., 2001. Researching the small enterprise. London: Sage. Dachs, B., Ebersberger, B. & Lööf, H., 2007. The Innovative Preformance of Foreign Owned Enterprises in Small Open Economies, s.l.: CESIS. Denisia, V., 2010. Foreign Direct Investment Theories: An Overview of the Main FDI Theories. European Journal of Interdisciplinary Studies, Issue 3, pp. 53 - 59. Department of Enterprise, Trade & Innovation, 2010. Trading and Investing in a Smart Economy: A Strategy and Action Plan for Irish Trade, Tourism and Investment to 2015, Dublin: Department of Enterprise, Trade & Innovation. Department of Jobs, Enterprise and Innovation, 2012. IDA Ireland End of Year Statement 2011. [Online] Available at: http://www.djei.ie/press/2012/20120105c.htm [Accessed 6 June 2012]. Di Giovanni, J., 2005. What Drives Capital Flows? The Case of Cross-border M&A Activity and Financial Deepening. Journal of International Economics, Issue 65, pp. 127-149. Dillman, D. A., 2007. Mail and Internet Surveys: The tailored Design Method. 2nd ed. New Jersey: Wiley. Diluna, K. L., 2003. An analysis of the decision makers and decision making process for corporate image apparel purchases, s.l.: North Carolina State University. Dimitropoulou, D., Burke, S. & McCann, P., 2007. The Determinants of the Location of Foreign Direct Investment in UK Regions, s.l.: Editorial Express.
  • 84. 77 DOMUS, 2006. Research on Nordic corporate internationalisation: Main Findings, s.l.: DOMUS. Driffield, N. & Munday, M., 2000. Industrial performance, agglomeration, and foreign manufacturing investment in the UK. Journal of International Business Studies, Issue 31, pp. 21-37. Duffy, M. E., 1985. Designing research the qualitative - quantitative debate. Journal of Advanced Nursing, 11(3), pp. 225-232. Dunning, J., 1991. Japanese multinationals in Europe and the United States: some comparisons and contrasts, s.l.: s.n. Dunning, J., 1993. Internationalizing Porter’s diamond (evaluation of M.E. Porter’s international competitiveness model). MAnagement International Review, 33(2), pp. 7-16. Dunning, J. H., 1980. Toward an eclectic theory of international production: some empirical test. Journal of International Business Studies, Issue 11, pp. 9- 31. Dunning, J. H., 1981. International Production and the Multinational Enterprise. s.l.:Allen & Unwin. Dunning, J. H., 1995. Re-appraising the Eclectic Paradigm in an Age of Alliance Capitalism. Journal of International Business Studies, 26(3), p. 4. Dunning, J. H., 2001. The Eclectic (OLI) Paradigm of International Production: Past, Present and Future. International Journal of the Economics of Business, 8(2), pp. 173-190. Dunning, J. H. & Narula, R., 1995. The R&D activities of foreign firms in the United States. International Studies of Management & Organization, 25(1 - 2), pp. 39 - 73. Dunning, J. H. & Rugman, A. M., 1985. The Influence of Hymer's Dissertation on the Theory of Foreign Direct Investment. The American Economic Review, 75(2), pp. 228 - 232. Durkan, J., FitzGerald, D. & Harmon, C., 1999. Education and Growth in the Irish Economy. In: F. Barry, ed. Understanding Ireland’s Economic Growth. London: Macmillan Press. Edmondson, A. C. & McManus, S. E., 2007. Methodological fit in management field research. Academy of Management Review, 32(1), pp. 1155- 1179. Egger, S. P., Larch, M., Pfaffermayr, M. & Winner, H., 2006. The impact of endogenous tax treaties on foreign direct investment: theory and evidence. Canadian Journal of Economics, 39(3), pp. 901-931. Eicher, T., Helfman, L. & Lenkoski, A., 2011. Robust FDI Determinants: Bayesian Model Averaging In The Presence Of Selection Bias, Washington: University of Washington. Encarnation, D. & Mason, M., 1994. Does Ownership Matter? Japanses Multinationals in Europe. New York: Clarendon Press.
  • 85. 78 Eurostat, 2012. Gross domestic expenditure on R&D, 2000-2010 (% share of GDP). [Online] Available at: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Gross _domestic_expenditure_on_R%26D,_2000- 2010_(%25_share_of_GDP).png&filetimestamp=20120112082042 [Accessed 7 July 2012]. Fan, Y., 2006. Branding the Nation: What is being Branded?. Journal of Vacation Marketing, 12(1), pp. 5-14. Fischer, S., 1977. Long-Term Contracting, Sticky Prices, and Monetary Policy: Comment. Journal of Monetary Economics, Volume 3, pp. 317 - 324. Forfás, 2009. Sharing Our Future: Ireland 2025 Strategic Policy Requirements for Enterprise Development, Dublin: Forfás. Fountas, S. & Aristotelous, K., 1995. An Empirical Analysis of Inward Foreign Direct Investment Flows in the European Union with Emphasis on the Market Enlargement Hypothesis, Galway: NUI Galway. Fujitsu.com, 2009. Fujitsu at a Glance. [Online] Available at: http://www.fujitsu.com/global/about/profile/info/ [Accessed 26 November 2010]. Gable, G. G., 1994. Integrating case study and survey research methods: an example in information systems. European Journal of Information Systems, 3(2), pp. 112-126. Gilmore, A., O'Donnell, A., Carson, D. & Cummins, D., 2003. Factors influencing foreign direct investment and international joint ventures. International Marketing Review, 20(2), pp. 195-215. Globerman, S. & Shapiro, D., 2004. Governance Infrastructure and U.S. Foreign Direct Investment, s.l.: EconWPA. Government of Ireland, 2008. Building Ireland’s Smart Economy: A Framework for Sustainable Economic Renewal, Dublin: The Stationary Office. Green, P. E. & Tull, D. S., 1970. Research for marketing decisions. 2nd ed. California: Prentice-Hall. Groh, A. P. & Wich, M., 2009. A Composite Measure to Determine a Host Country's Attractiveness for Foreign Direct Investment, Barcalona: University of Navara. Grosse, R. & Behrman, J. N., 1992. Theory in international business. Transnational Corporations, 1(1), pp. 93 -126. Gummeson, E., 2003. All research is interpretive. Journal of Business & Industrial Marketing, 18(6), pp. 482-492. Gunnigle, P. & McGuire, P., 2001. Why Ireland? A Qualitative Review of the Factors Influencing the Location of US Multinationals in Ireland with Particular Reference to the Impact of Labour Issues. The Economic and Social Review, 32(1), pp. 43 - 67. Hair, J. F., Wolfinbarger, M. F., Ortinau, D. J. & Bush, R. P., 2008. Essentials of marketing research. Boston: McGraw-Hill.
  • 86. 79 Hakim, C., 2000. Research Design: Successful Designs for Social and Economic Research. 2nd ed. London: Routledge. Hansen, M. W., 2004. Foreign direct investment and the environment: A transaction cost perspective, Copenhagen: Copenhagen Business School. Head, K., Ries, J. & Swenson, D., 1995. Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments. Journal of International Economics, 38(1), pp. 223-247. Hewitt-Dundas, N., Singh, A., Ho, Y.-P. & Wong, P. K., 2010. Knowledge flows of innovation in small open economies – comparative analysis of Ireland and Singapore. s.l., Paper presented at the Institute for Small Business and Entrepreneurship Conference. Hillebrand, B., Kok, R. A. W. & Biemans, W. G., 2001. Theory-testing using case studies: A comment on Johnston, Leach, and Liu. Management International Review, 30(8), pp. 651-657. Hochtberger, K., White, M. & Grimes, S., 2004. The Evolution of Multi- National Computer Services Affiliates in Ireland, s.l.: Centre For Innovation & Structural Change. Hoegen, M., 2009. Statistics and the quality of life: Measuring progress – a world beyond GDP, s.l.: Organisation for Economic Cooperation and Development. Hornberger, K., Battat, J. & Kusek, P., 2011. Attracting FDI: How much does Investment Climate Matter, New York: The World Bank Group. Hymer, S. H., 1976. The International Operations of National Firms: A Study of Foreign Direct Investment. Cambridge: MIT Press. IBM, 2011. Global Location Trends 2011 Annual Report, Dublin: IDA Ireland. IDA Ireland, 2010. IDA Ireland Annual Report and Accounts 2010, Dublin: IDA Ireland. IDA Ireland, 2011. Ireland Vital Statistics 2011, Dublin: IDA Ireland. IDA Ireland, 2012. Ireland Vital Statistics, Dublin: IDA Ireland. IDA, 2010b. Horizon 2020: IDA Ireland Strategy, Dublin: Industrial Develooment Authority of Ireland. IMD, 2012. IMD World Competitiveness Yearbook 2012, s.l.: IMD. IMD, 2012. World Competitiveness Online. [Online] Available at: https://www.worldcompetitiveness.com/OnLine/App/Index.htm [Accessed 7 June 2012]. IMF, 2001. Determinants of, and the Relation Between, Foreign Direct Investment and Growth: A Summary of the recent Literature, s.l.: International Monetary Fund. Jick, T., 1979. Mixing qualitative and quantitative methods: Triangulation in action. Administrative Science Quarterly, Volume 24, pp. 602-611.
  • 87. 80 Jin, W. & Julie, B., 2000. An exploratory study of a multi-expectation framework for services. Journal of Services Marketing, Volume 14, pp. 411- 431. Johnson, A., 2005. Host Country Effect of Foreign Direct Investment: The Case of Developing and Transition Economies, s.l.: Högskolan i Jönköping. Johnson, B. & Onwuegbuzie, A., 2004. Mixed methods research: A research paradigm whose time has come. Educational Researcher, Volume 33, pp. 14- 26. Jones, R. W., 1980. Comparative and Absolute Advantage. Swiss Journal of Economics and Statistics, 116(III), pp. 235-260. Kano, N., 2001. Life cycle and creation of attractive quality. Linkoepings Universitet, Sweden, s.n. Kano, N., Seraku, N., Takahashi, F. & Tsuji, S., 1984. Attractive Quality and Must-be Quality. The Journal of the Japanese Society for Quality Control, 14(2), pp. 39-48. Kerlinger, F., 1986. Foundations of behavioural research. 3rd ed. New York: Rinehart and Winston. Kindleberger, C., 1969. American Business Abroad. New Haven: Yale University Press. Kinoshita, Y. & Campos, N. F., 2002. The location determinants of foreign direct investment in Transition Economies, Tokyo: Institute of Social Science, University of Tokyo. Kinoshita, Y. & Mody, A., 1997. The Usefulness of Private and Public Information for Foreign Investment Decisions, s.l.: World Bank. Kobrin, S. J., 1979. Political risk: a review and reconsideration. Journal of International Business Studies, 10(1), pp. 67-80. Kogut, B., 1985. Comparative and competitive value added chains. Sloan Management Review, 26(4), pp. 15-28. Kolstad, I. & Villanger, E., 2004. How does social development affect FDI and domestic investment?, Bergen: Chr. Michelsen Institute CMI. Kotler, P. & Gertner, D., 2002. Country as Brand, Product, and Beyond: A place marketing and brand management perspective. Journal of Brand Management, 9(4), pp. 249-261. Kuemmerle, W., 1996. Home Base and Foreign Direct Investment in R&D, Boston: s.n. Lai, H.-J. & Wu, H.-H., 2011. A Case Study of Applying Kano’s Model and ANOVA Technique in Evaluating Service Quality. Information Technology Journal, 10(1), pp. 89-97. Lall, S., 2002. Linking FDI, technology development for capacity building and strategic competitiveness. Transnational Corporations, 11(3), pp. 39-88. Lee, A. S., 1991. Integrating Positivist and Interpretive Approaches to Organizational Research. Organization Science , 2(4), pp. 342-365.
  • 88. 81 Liang, G., 2004. New Competition: Foreign Direct Investment and Industrial Development in China, Rotterdam: Erasmus University. Li, H. & Clarke-Hill, C. M., 2004. Sino-British joint ventures in China: Investment patterns and host country conditions. European Business Review, 16(1), pp. 44-63. Lim, E.-G., 2001. Determinants of, and the Relation Between, Foreign Direct Investment and Growth: A Summary of the recent Literature, s.l.: International Monetary Fund. Lohan, M., 2007. Ireland’s progression towards a Knowledge Economy: An investigation into the perceptions of Research & Development Managers with- in established Multi-National Companies (MNCs), as to the reason that MNCs invest in R&D Activities in Ireland, Galway: National University of Ireland, Galway. Lumbila, K. N., 2005. What Makes FDI Work? A Panel Analysis of the Growth Effects of FDI in Africa, s.l.: The Worldbank. MacDonald, E., Backsell, M., Gonzalez, R. & Papalambros4, P., 2006. The Kano Method’s Imperfections, and Implications in Product Decision Theory. Seoul, Korea, International Design Research Symposium. Marshall, C. & Rossman, G. B., 1999. Designing qualitative research. Thousand Oaks: Sage Publications. Matheson Ormsby Prentice, 2012. Investing in Ireland: A survey of foreign direct investors, A report from the Economist Intelligence Unit, Dublin: The Economist. Mauro, P., 1997. Why worry about corruption?. Economic Issues, 6(2). Maxwell, J. A., 2005. Qualitative Research Design: An Interactive Approach. s.l.:Sage. McMillan, J. & Schumacher, S., 1993. Research in education: A conceptual introduction. 3rd ed. New York: Harper. Medvedev, D., 2006. Beyond Trade: The Impact of Preferential Trade Agreements on Foreign Direct Investment Inflows, s.l.: World Bank. Miyamoto, K., 2003. Human Capital Formation and Foreign Direct Investment in Developing Countries, s.l.: Organisation for Economic Co- operation and Development (OECD). Mody, A., Dasgupta, S. & Sinha, S., 1998. Japanese Multinationals in Asia: Drivers and Attractors, Washington D.C.: The World Bank. Molina-Azorin, J. F., 2012. Mixed Methods Research in Strategic Management: Impact and Applications. Organizational Research Methods, 15(1), pp. 33-56. Moran, T. H., 1998. Foreign Direct Investment and Development, Washington: Institute for International Economics. Morisset, J., 2003. Does a country need a promotion agency to attract foreign direct investment?: A Small Analytical Model Applied to 58 Countries, s.l.: The World Bank.
  • 89. 82 Narula, R. & Zanfei, A., 2003. Globalisation of Innovation: The Role of Multinational Enterprises, s.l.: DANISH RESEARCH UNIT FOR INDUSTRIAL DYNAMICS. Naudé, W. A. & Krugell, W. F., 2007. Investigating geography and institutions as determinants of foreign direct investment in Africa using panel data. Applied Economics, 39(10), pp. 1223-1233. Neumayer, E. & Spess, L., 2005. Do Bilateral Investment Treaties Increase Foreign Direct Investment to Developing Countries?. World Development, 33(10), pp. 1567-1585. Nigh, D., 1985. The Effect of Political Events on US Direct Foreign Investment: A Pooled Time-Series Cross-Sectional Analysis. Journal ofInternational Business Studies, 16(1), pp. 1-17. Noorbakhsh, F., Palom, A. & Youssef, A., 2001. Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence. World Development, 29(9), pp. 1593-1610. O'Cathain, A., 2009. Mixed methods research in the health sciences: A quiet revolution. Journal of Mixed Methods Research, 3(1), pp. 3-6. O'Connell, L., Egeraat, C. v. & Enright, P., 1997. Clusters in Ireland: The Irish Dairy Processing Industry: An Application of Porter's Cluster Analysis, Dublin: National Economic and Social Council (NESC). O'Connor, T. P., 2001. Foreign Direct Investment And Indigenous Industry in Ireland: Review of Evidence, Brighton: One-Europe Programme. OECD, 1996. OECD Benchmark Definition of Foreign Direct Investment, Paris: OECD. OECD, 1997. Foreign Direct Investment and the Environment: An Overview of the Literature, s.l.: Organisation for Economic Co-operation and Development. OECD, 2003. Checklist for Foreign Direct Investment Incentive Policies, s.l.: OECD. OECD, 2009. Regions Matter: Economic Recovery, Innovation and Sustainable Growth, Paris: OECD. OECD, 2011. Higher education in Regional and City Development: Catalonia Spain, Paris: OECD. OECD, 2012. FDI In Figures, s.l.: OECD Investment Division. OECDX, 2003. Checklist for Foreign Direct Investment Incentive Policies, s.l.: OECD. O'Gorman, C., O'Malley, E. & Mooney, J., 1997. The Irish indigenous software industry: An application of Porter's cluster analysis, Dublin: s.n. O'Malley, E. & O'Gorman, C., 2001. Competitive Advantage in the Irish Indigenous Software Industry and the Role of Inward Foreign Direct Investment. European Planning Studies, 9(3), pp. 3030-321. Ozturk, I., 2007. Foreign direct investment—growth nexus: a review of the recent literature. International Journal of Applied Econometrics and Quantitative Studies, 4(1), pp. 79-98.
  • 90. 83 Park, K. H., 2003. Patterns and strategies of Foreign Direct Investment: the case of Japanese firms. Applied Economics, 1(35), pp. 1739-1746. Peterson, M., Malhota, N. & Wagner, J., 1999. Country Quality of Life and Foreign Direct Investment Decisions. Global Outlook, 11(1), pp. 51-62. Peterson, R. & Jolibert, A., 1994. A quantitative analysis of country of origin effect, Austin: University of Texas. Piteli, E. E. N., 2010. Determinants of foreign direct investment in developed economies: A comparison between European and non-European countries. Contributions to political economy, 29(1), pp. 111-128. Porter, M., 1990. The Competitive Advantage of Nations. London: McMillan Press. Porter, M. E., 2003. The Economic Performance of Regions. Regional Studies, 37(6 & 7), pp. 549-578. Puga, D. & Venables, A., 1999. Agglomeration and economic development: import substitution versus trade liberalization. The Economic Journal, Volume 109, pp. 292-311. Punch, K. F., 2005. Introduction to Social Research: Quantitative and Qualitative Approaches. 2nd ed. s.l.:Sage Publications. Ramcharran, H., 2000. Foreign Direct Investments in Central and Eastern Europe: An Analysis of Regulatory and Country Risk Factors. American Business Review, 18(2), pp. 1-8. Razin, A. & Sadka, E., 2007. Foreign Direct Investment: Analysis of Aggregate Flows. Princeton: Princeton University Press,. Razin, A., Sadka, E. & Tong, H., 2008. Bilateral FDI Flows: Threshold Barriers and Productivity Shocks. CESifo Economic Studies, 54(3), pp. 452- 470. Reuber, G. L., Crookell, H. & Gallais-Hamonno, G., 1973. Private foreign investment in development. Oxford: Clarendon Press. Rios-Morales, R. & Brennan, L., 2007. Ireland’s Foreign Direct Investment Competitive Advantage and Japanese Outward Foreign Direct Investment. Asia Pacific Business Review, 13(2), pp. 201 - 231. Rios-Morales, R. & O'Donovan, D., 2006. Can the Latin American and Caribbean countries emulate the Irish. Economic Commission for the Latin American and Caribbean Countries Review, 1(88), pp. 55-70. Robson, C., 2002. Real World Research. 2nd ed. Oxford: Blackwell. Rodriguez, X. A. & Pallas, J., 2008. Determinants of foreign direct investment in Spain. Applied Economics, 40(19), pp. 2443-2450. Ruane, F. & Gorg, H., 2000. European integration and peripheral: lessons from the Irish experience. World Economy, 23(3), pp. 406 - 421. Ryan, P., Giblin, M. & Walshe, E., 2004. From Subcontracted R&D to Joint Collaboration: The role of Trust in Facilitating This Process. International Journal of Innovation and Technology Management, 1(2), pp. 1-27.
  • 91. 84 Saggi, K., 2002. Trade, Foreign Direct Investment, and International Technology Transfer: A Survey. The World Bank Research Observer, 17(2), pp. 191-235. Sauerwein, E., Bailom, F., Matzler, K. & Hinterhuber, H. H., 1996. The Kano Model: How to delight your customers. Innsbruck, Austria, International Working Seminar on Production Economics, pp. 313-327. Saunders, M., Lewis, P. & Thornhill, A., 2009. Research Methods for Business Students. 5th ed. London: Prentice Hall. Sawkut, R., Boopen, S., Taruna, R.-S. & Vinesh, S., 2007. Determinants of FDI: Lessons from African Economies, s.l.: s.n. Schneider, F. & Frey, B. S., 1985. Economic and Political Determinants of Foreign Direct Investment. World Development, 13(2), pp. 161-175. Serapio, . M. & Dalton, D., 1999. Globalization of industrial R&D: an examination of foreign direct investment in R&D in United States. Research Policy, Issue 28, pp. 303-316. Shimp, T. A., Saeed, S. & Madden, T., 1993. Countries and their products: A cognitive structure perspective. Journal of the academy of Marketing Science, 21(4), pp. 323-330. Singh, H. & Jun, K. W., 1995. Some New Evidence on Determinants of Foreign Direct Investment in Developing Countries, Washington: The World Bank. Solomon, E. M., 2011. Foreign Direct Investment, Host Country Factors and Economic Growth. Ensayos Revista de Economía, 30(1), pp. 41 - 70. Stuart, I. et al., 2002. Effective case research in operations management: A process perspective. Journal of Operations Management, 20(5), pp. 419-433. Tashakkori, A. & Teddlie, C., 2003. Handbook of mixed methods in Social and Behavioural Research. Thousand Oaks, Califormia: Sage. Tellis, W., 1997. Introduction to Case Study. The Qualitative Report, 3(2). ter Maat, V., 2011. User Experience Grading via Kano Categories, Utrecht: Utrecht University. Torrisi, C. R., Delaunay, C. J., Kocia, A. & Lubieniecka, M., 2008. FDI in Central Europe: Determinants and Policy Implications. Journal of International Finance and Economics, 8(4), pp. 136-147. Uluskan, M., 2010. Improving the Competitiveness of the Haitian Apparel Supply, s.l.: North Carolina State University. UNCTAD, 1998. World Investment Report 1998: Trends and Determinants, Geneva: UNCTAD. UNCTAD, 2005. World Investment Report 2005: Transnational Corporations and the Internationalization of R&D, New York and Geneva: United Nations Publication. UNCTAD, 2006. Measuring Restrictions on FDI in Services in Developing Countries and Transition Economies, New York and Geneva: United Nations Conference on Trade and Development.
  • 92. 85 UNCTAD, 2006. World Investment Report 2006 FDI from Developing and Transition Economies: Implications for Development, New York and Geneva: United Nations Conference on Trade and Development. UNCTAD, 2007. The Universe of the Largest Transnational Corporations, New York and Geneva: United Nations Conference on Trade and Development. UNCTAD, 2008b. Wor1d Investment Report 2008: Transnational Corporations and the Infrastructure Challenge, s.l.: United Nations Conference on Trade and Development. UNCTAD, 2008. World Investment Prospects Survey 2008 - 2010, New York: United Nations Conference on Trade and Development. UNCTAD, 2010. World Investment Report 2010: Investing in a Low-Carbon Economy, New York and Geneva: United Nations. UNCTAD, 2011. World Investment Report 2011: Non-Equity Modes of International Production and Development, Switzerland: United Nations. Vissak, T., 2010. Recommendations for Using the Case Study Method in International Business Research. The Qualitative Report, 15(2), pp. 370-288. Walsh, J. P. & Yu, J., 2010. Determinants of Foreign Direct Investment: A Sectoral and Institutional Approach, s.l.: IMF. Watson, G. H., 2003. Customer focus and competitiveness. s.l.:in Stephens, K.S. Six Sigma and Related Studies in the Quality Disciplines. Milwaukee: ASQ Quality Press.. Wei, S.-J., 2000. How Taxing is Corruption on International Investors?. Review of Economics and Statistics, 82(1), pp. 1-11. Wheeler, D. & Mody, A., 1992. International Investment Location Decisions: The Case of US Firms. Journal of International Economics , Issue 33, pp. 57- 76. White, M. C., 2003. Inward Investment, Firm Embeddedness and Place: An Assessment of Ireland’s Multinational Software Sector, Galway: Centre for Innovation and Structural Change. Williamson, O. E., 1975. Markets and Hierarchies: Analysis and Antitrust Implications. New York: Free Press. Williamson, O. E., 2009. Transaction cost economics, an overview. [Online] Available at: http://organizationsandmarkets.files.wordpress.com/2009/09/williamson-o- transaction-cost-economics-an-overview.pdf [Accessed 8 Feb 2012]. World Bank, 1996. What determines foreign direct investment?, s.l.: World Bank. World Bank, 1997. Lessons of Experience: Foreign Direct Investment, Washington DC: International Finance Corporation and Foreign Investment Advisory Service.
  • 93. 86 World Bank, 2002. Foreign Direct Investment Survey: A study conducted by the multilateral investment guarantee agency, Washington DC: The World Bank Group/MIGA. Yang, C. C., 2005. The refined Kano’s model and its application. Total Quality Management, 16(10), pp. 1127-1137. Yin, R., 1994. Case study research: Design and methods. 2nd ed. Beverly Hills, California: Sage Publishing. Yin, R. K., 2003. Case study research, design and methods. Thousand Oaks, California: Sage Publications.
  • 94. 87 7 Appendices 7.1 Appendix I Online Questionnaire
  • 95. 88
  • 96. 89
  • 97. 90
  • 98. 91
  • 99. 92
  • 100. 93 7.2 Appendix II: Interview Format Interview Questions for Thesis by Ronan Coy This interview deals with the factors that influenced your decisions to invest in Ireland. This thesis is especially interested in your perceptions that led to your decision to invest in Ireland and the location-specific determinants that affected your decision. The interview is to be conducted on interviewee site or if not, at most convenient location for interviewee. The interview will last for 1 hour maximum and follows on from the online survey. Permission is sought to record the interviews on dictaphone, which will then be transcribed for coding/analysis purposes. Free Form Questions Key Factors  What prompted your company to invest in Ireland?  What are the main factors that influenced your decision to invest in Ireland? Perceptions  How would you describe the investment landscape in Ireland at the moment?  What is the Japanese sentiment towards Ireland?  What is your view of the role of the Irish government and its institutions when investing in Ireland?  What policies promoted by the Irish government do you see as the most positive in attracting investment from Japan?  What economic factors, if any, were taken into account when making your decision to invest in Ireland? Does the economic outlook affect the likelihood of further investment in Ireland?  How do you feel about the costs of doing business in Ireland and the level of bureaucracy in getting things done? Did this affect your investment decision?  What impact did the Irish labour force, its educational attainment and its knowledge and skills have on your investment decision?  Do you feel that having previous knowledge of Ireland played a role in your decision to invest in R&D in Ireland? Future Changes  Given the perceived location-specific factors for investment in Ireland, what can Ireland do to encourage greater investment from Japan?