The role of relatedness and strategic linkages between domestic and MNE sectors in regional branching and resilience

Abstract Despite the key role of multinational enterprises (MNEs) in both international markets and domestic economies, there is no consensus on their impact host economy. In particular, do MNEs stimulate new firms through knowledge spillovers? Here, we look at entry exit industries Irish regions before, during, after 2008 Financial Crisis. Specifically, are interested whether presence a region results spillovers creation related sectors. To quantify how an industry to region’s basket propose two cohesion measures, weighted closeness strategic which capture direct linkages dense inter-industry links between local respectively. We use dataset government-supported Ireland (covering 90% manufacturing exporting) 2006 2019. find that more likely enter less leave if they so-called ‘overlapping’ containing MNE firms. contrast, negative survival from ‘exclusive MNE’ industries, suggesting unable ‘leap’ thrive MNE-proximate due technology or know-how gap. Finally, type matters. During economic recovery (2015–2019), it rather than overlapping associated with survival.