The Effect of Real Exchange Rate Movements on the Life Expectancy of Manufacturing Plants in Ireland, 1973-94

We estimate the factors that affect the life expectancy of plants operating in the manufacturing sector of Ireland over the period 1980-1994. Our results suggest that real exchange rate appreciations have caused a great number of infant mortalities in domestic plants both in the traditional and high tech sectors over this period. Real effective exchange rate movements are estimated to have no effect on the plant life expectancy of foreign owned firms. Domestic plants operating in the high-tech sector are estimated to have a higher life expectancy than those operating in the traditional sector. In addition, the real exchange rate effect on the survival rates of domestic plants in the R&D intensive sectors even though significant is weaker compared with the traditional sector.