Coagglomeration and spillovers

We study the coagglomeration of domestic plants and foreign multinationals and the impact of this on domestic plant productivity and employment using data for Irish manufacturing. Relying on a recently developed index, we find that coagglomeration has been important for a number of industries. Our econometric analysis reveals that local foreign presence has indeed resulted in productivity spillovers to domestic plants, although only in those industries where there has been coagglomeration. Further evidence suggests that these spillovers have also resulted in more jobs.