International Economics

This research programme is part of the Centre for International Economics and Competitiveness and focuses on the analysis of key factors, economic effects and policies of international and European integration. It covers three main research areas:

·          International Macroeconomics

·          International Trade and Investment

·          International Finance

 

(a) International Transmission of Business Cycles: This research is part of a project funded under the Irish Research Council for the Humanities and Social Sciences. Goggin and Siedschlag (2009) analysed patterns and determinants of the international transmission of business cycles between Ireland and its trading partners over the past three decades. This research finds that deeper trade integration had a strong direct positive effect on the synchronisation of Irish business cycles with its trading partners. Sectoral specialisation and national competitiveness differentials were sources of cyclical divergence. Sectoral specialisation had however an indirect positive effect on business cycle synchronisation via its positive effect on trade and financial integration.

 

(b) Internationalisation of Production and Services. This researchis part of an international research consortium led by the ESRI in co-operation with nine leading universities and research institutes in Europe, funded under the EU 6th RTD Framework Programme. Siedschlag, Zhang and Smith (2009) analysed determinants of the location choice of multinational firms in the ICT sector. This research finds that on average, the location probability of foreign affiliates in ICT manufacturing and services increases with market size, market potential, the presence of other foreign-owned firms in the ICT sector, human capital, income tax, and decreases with the corporation tax rate. In addition, in the case of foreign affiliates in ICT services, the innovation intensity in the ICT sector has a positive effect on the location probability.

 

(c) International Trade. Research on international trade and firm heterogeneity is funded under a grant from the Irish Research Council for the Humanities and Social Sciences. Research shows that economic activity is heavily concentrated among firms that engage in intra-firm trade and firms that export and import. Firm performance, in terms of size, productivity, average wages and fuel use, is higher the more dimensions of trade a firm is engaged in and also depends on the location of trading partners. However, there is also substantial variation in firm performance among plants that have a similar exposure to trade. Further research in this area,  (Morgenroth, 2009) funded by InterTrade Ireland, considered the degree to which the trade intensity between Northern Ireland and the Republic of Ireland is above, at or below the trade potential, by estimating gravity models for exports and imports for a set of bilateral trade flows. The key finding was that once important geographic factors are taken account of, the level of trade between the two parts of the island is below the expected level for most sectors.

Other staff currently working in this area include: John Fitz Gerald, Jean Goggin, Stefanie Haller, Edgar Morgenroth, Gavin Murphy, Frances Ruane, Donal Smith, Richard Tol and Xiaoheng Zhang.