DEPARTMENT OF ECONOMICS, UNIVERSITY OF LIMERICK, IRELAND Paper for Global Technology: Multinational Corporations and Innovation Processes, Turin, Italy, October 1-2. Multinational Enterprises and Worker Mobility: An Empirical Model of the Irish Software Industry

Foreign direct investment is a key driving force behind the growth and development of the software industry in the Irish economy. This paper examines worker mobility as a key channel through which multinational enterprise (MNE) subsidiaries can raise productivity in host country indigenous firms with an application to the Irish software industry. The basic premise is that workers, while employed by MNEs, are in contact with advanced technologies that can improve their human capital. Some of these workers may subsequently move to local firms or set up new firms bringing with them the knowledge they acquired in the MNE.