ABSTRACT
Throughout most of the 1990s, Gross Domestic Product (GDP) growth in Ireland far exceeded that of other European countries. While this exceptional growth performance allowed Ireland to converge rapidly to the European Union average per capita GDP, it was also accompanied by a growing divergence between Irish regions with respect to per capita GDP. Employment growth rather than productivity growth has been the major driving force of the recent high growth and convergence period of the Irish economy. In the case of Ireland, the role of small and medium sized enterprises (SMEs) in regional development has not been examined extensively. There is little existing literature that explicitly examines the general significance of SMEs in regional development and growth in Ireland. Given that new large start-ups also made a further independent contribution to growth, there appears to be no general rule that SMEs contribute more to growth than large firms.
