Ireland’s Attractiveness for Foreign Direct Investment

Irish economy succeeds as one of the most competitive market in global economies. Within combination of factors, Ireland’s development transformed the country into an attractive investment destination. Therefore, this essay will determine components involved that affect in Ireland’s growth and provide its different dimensions including political, economic, socio-cultural, technological, environmental and legal system (PESTEL) which are integrated with control, risks, costs and benefits as the country’s attractiveness for Foreign Direct Investment (FDI).

Political

Initially, Ireland’s independence from Britain had become turning point for Ireland. In the transition period, the country’s standard of living declined and neither foreign trade nor investment has been an issue yet (Hill, 2007). At the time, the political risk was a movement from Irish Republican Army which gradually became less intense.

Moreover, Irish government subsequently proved its reliability to recover Ireland’s political condition through its election process that held periodically, policy enforcement, and led to establishment of political stability in the country (Hill, 2007). Further, its political stability was able to develop democracy system and encouraged civil rights for the society which indicated a safe atmosphere for foreign companies to invest in the country.

Next, Ireland’s government responds strongly to the global market demand. Looking of the growing foreign companies, the government set up a lower corporate tax compared with other countries in European Union (Hill, 2007). Thus, Ireland able to offer foreign companies a higher profit opportunity for both direct and indirect foreign investment.

Furthermore, Ireland participates in global o...

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...sport and telecommunication sector. Also, Ireland’s Common Law system advantages foreign companies in enhancing their control in order to establish their business contracts in the country.

In conclusion, Ireland is favorable country for FDI regarding its markets, resources, knowledge, efficiency, security and foreign trade opportunities. Further, from the country’s attractiveness that integrated with its PESTEL proved that the benefits and control for foreign companies were able to overcome the risks and costs that they have to bear with. The fact that Ireland was also dragged by global economic recession in 2008 had drawn the country’s GDP and economy condition (The World Factbook, 2009). However, the country’s supports due to foreign investment and government commitment in its political-economy regulations are trusted to sustain Ireland in long-term performance.