The latest Assessment Report of the Fiscal Council is available here.
Academics and policy-makers agree that innovation is of critical importance for business productivity and growth, explaining the substantial body of research in this area. There is broad consensus that factors, such as R&D spend, firm age, firm size, sector, ownership and location, influence innovation performance, with many studies finding evidence of these relationships in Irish firms. Recently, with my colleague Frank Crowley, I have begun to investigate the influence of human resource practices on innovation performance.
A crucial element in firms’ strategic decision-making is the identification and effective harnessing of complementarities between different managerial activities, optimising resource use. Using Irish workplace data, we investigate if human resource practices can benefit innovation, particularly when applied together. These practices are not generally introduced for the purpose of improving innovation outcomes, but we find some evidence of ‘unintended consequences’ for innovation. Our primary findings are that bundles of HR practices relating to performance management and appraisal, knowledge sharing and involvement, and empowerment in decision making all are positively associated with innovation in manufacturing and service firms, and bundles of flexible employment contracts practices positively influence innovation in service firms. The full paper will be published in the International Journal of Innovation Management
I gave the economics lecture at the recent national conference at NUIG commemorating the centenary of the Easter Rising. I had three main messages. First, the economic history of post-independence Ireland was not particularly unusual. Very often, things that were happening in Ireland were happening elsewhere as well. Second, for a long time we were hampered by an excessive dependence on a poorly performing UK economy. And third, EC membership in 1973, and the Single Market programme of the late 1980s and early 1990s, were absolutely crucial for us. Irish independence and EU membership have complemented each other, rather than being in conflict: each was required to give full effect to the other. Irish independence would not have worked as well for us as it did without the EU; and the EU would not have worked as well for us as it did without political independence.
ESRI is looking to recruit 2 senior research economists in macroeconomics
The ESRI is seeking to expand its existing research capabilities in the following areas; housing, public finances and general macroeconomics. Accordingly, the Institute is looking to hire two senior research economists with proven track records in applied, econometric research in any or all of these areas. The appointments may be tenure track positions or on a secondment basis. The roles will involve contributing and leading research programmes in housing, public finances and general macroeconomics and the successful candidates will be expected to produce relevant high-quality research papers which can be published in both international peer-reviewed journals and domestically-oriented policy papers.
More information can be found here:
For any queries concerning the position, e-mail: firstname.lastname@example.org
Trinity are advertising an Assistant Professorship in Economics with a focus on international macroeconomics, though all fields are welcome to apply. The job ad is here.
There’s a lot of wrong-headed analysis doing the rounds on the implications of the proposals of the new US Administration for Ireland. Will US companies “be enticed home” by a dramatic cut in the US corporate tax rate? Companies don’t primarily come to Europe for tax reasons. They come for market access. Ireland captures a disproportionate share of these inflows, to a large extent because our rate is low RELATIVE TO OTHER European rates. In fact, given the US tax-credit system, US MNCs in Europe would not be able to recoup upon repatriating their profits the difference between high European rates and a potential new low US rate; this would work in Ireland’s favour (to the disadvantage of high-rate European economies).
Lower rates outside the US encourage US MNCs to keep their profits offshore (though a huge proportion of these can actually be, and are, held in US bonds and banks). If fewer profits are held offshore this WILL reduce overseas RE-investments, as these are currently financed out of offshore profits.
A dramatic reduction in the US rate would reduce the inventive for re-domiciling, though, as John FitzGerald and Mary Everett (of the Central Bank) have both shown, re-domiciling into Ireland probably does us more harm than good. In any case large, rich, central (as opposed to peripheral) economies tend to have higher corporate tax rates for revenue-maximising reasons.
US protectionism would trigger retaliation which would in turn trigger vastly more tariff-jumping FDI into Europe and elsewhere. Nor would a retreat of US corporations to the US mean that their external sales would be replaced by US exports; a substantial proportion would be captured by foreign competitor companies. And a huge proportion of current US exports go as inputs to their own subsidiaries abroad. The US State Department would also not be happy with a reduction in US FDI: think of the “soft power” this overseas investment grants the US. So the proposed very low US rate is unlikely to be in America’s interests. This might well impact on the chances of getting the proposals through Congress, even if President-elect Trump decides to run with them.
Two interesting think pieces in the Irish Times today. One by TCD’s Brian Lucey on the challenges and opportunities facing Ireland’s Higher Education sector after Brexit, and another by UCC’s Phillip O’Kane on creating a single International University of Ireland made of the best bits of the higher education landscape.
The Deparment of Finance and the ESRI have a briefing paper modeling the impact of Brexit on the Irish economy. Their takeaway:
the level of Irish output is permanently below what it otherwise would have been in the absence of BREXIT.