Economy of Celtic Tiger: Foreign Direct Investment Issue

This diploma thesis deals with investment incentives and their effect on the economy of Ireland in historical and contemporary context. The introduction focuses on the general issue of foreign direct investment and investment incentives. After the summary of geographic and socioeconomic characteristics of the state the work describes an economic development of Ireland from 17 century to the present, especially the important historical events and their influence on the Irish economy. In the main part of this thesis, which is focused on the Irish investment incentives, are listed the general factors of the Irish economy in the form of so-called comparative advantages (high mobility and high skills of workforce, low labor costs) including specific benefits for U.S. investors (culture similarity, no language barrier, favorable geographic location, quality infrastructure) and economic and political measures in the field of direct investment, that Ireland has implemented to attract foreign investors (building of modern telecommunications infrastructure, the international experience of workforce and the establishing of organizations to promote foreign direct investment). Next the work analyses development of investment incentives from the beginning of their application in the 70th of the 20th century through the industrial "boom" in the 90th of the 20th century to the present, focusing on those of them that were key for the development of the Irish economy (taxes on income, efficient infrastructure, a flexible labor market, etc.). Consequently, there is a given forecast of Ireland in the coming years. There is evaluated the impact of investment incentives on the development of the Irish economy and outlined the direction in which the incentives in Ireland will take in the near future.