Economic Integration and New Firm Formation: Evidence from the United Kingdom and Ireland

The paper examines the impact of economic integration on enterprise in a small open economy. The paper analyses large, small and total new company registrations in Ireland. It examines the impact of spill-overs from the United Kingdom labour market and product market on Irish firm formation. The study finds that negative labour market spill-overs dominate positive product market spill-overs so that a net negative effect results from Irish - British economic integration. The results indicate that enterprise in peripheral economies may be more vibrant if product market integration is introduced before labour market integration. The paper also finds enterprise to be positively affected by the number of university graduates in the labour force. House prices are found to