INTERMEDIATE GOODS INPUTS AND THE UK CONTENT OF IRISH GOODS EXPORTS. ESRI EVIDENCE FOR POLICY, JULY 2018

Lawless, Martina (2018) INTERMEDIATE GOODS INPUTS AND THE UK CONTENT OF IRISH GOODS EXPORTS. ESRI EVIDENCE FOR POLICY, JULY 2018. [Working Paper]

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Abstract

This research aims to provide empirical evidence on the import content of Irishowned firms’ exports of manufactured goods and how these firms may be exposed to changes in the trading environment after Brexit. Although a number of papers have examined the effect of Brexit on goods exports from Ireland to the UK by applying WTO-level tariffs, none to date have examined the extent to which goods exports may also incorporate imported intermediates or examined how the effects of Brexit could differ across firms. The focus on imports of intermediate products in this report comes from their contribution to the export competitiveness of Irish firms. The key policy motivation in undertaking this analysis therefore is to examine whether, and to what extent, the export activity of Irish-owned firms could potentially be exposed to disruptions in the supply chain coming from a negative effect of Brexit on their inputs from the UK. To investigate these issues, this report provides an in-depth analysis using firmlevel information on both importing and exporting from the CSO customs-level data to examine at a very granular level how much firms import, what types of products are involved and how imported goods inputs contribute to firm-level exporting activity.1 Crucially, in terms of understanding the distribution of any impact, we are also able to examine how these patterns vary depending on whether the firm is Irish-owned or foreign-owned and across firm size groups. We also examine at a product level the areas where total Irish goods imports are particularly reliant on the UK as a source country.

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