Multinational Firms Motivations and Foreign Direct Investment Decisions: An Analysis of the Software & IT and Financial Services Sectors in the Irish Context

The paper focuses on the way greenfield foreign direct investment in different sectors is influenced by locational characteristics and explores the role of policy in attracting and retaining foreign investment. We contribute to the literature by empirically investigating the investment motivations of multinational companies in the Software & IT and Financial Services sectors in Ireland and those locational factors that contribute to the retention of foreign direct investment. The methodology used in this research is of a qualitative nature and an exploratory deductive approach is adopted in order to gain an understanding of firms’ internationalisation decisions and motivations. The data demonstrates that companies in the two sectors follow different investment motivations. Firms in the Software & IT sector entered Ireland primarily because of the availability of a high quality workforce. Whereas firms in the Financial Services sector entered Ireland following the deregulation of markets and the subsequent ease of doing business. The paper builds on these findings to develop policy recommendations.