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Subnational politics and foreign direct investment in Mexico

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  • Steven Samford
  • Priscila Ortega G�mez

Abstract

Focusing on Mexico, this article makes two departures from existing studies of the determinants of foreign direct investment (FDI): (1) it disaggregates investment into three types (resource-, market- and efficiency-seeking); and (2) it models variation in investment subnationally, across the 32 Mexican states. Using panel data for foreign investment between 2000 and 2009, we find that the predictors of subnational variation in investment go beyond simple geographic and economic conditions and include factors such as local political party control, social stability and the perceived effectiveness of state authorities. Moreover, the three types of investment are shaped by distinct social, political and economic dynamics. Insofar as the location and type of foreign investment can affect economic development and inequality within - and not just between - countries, the subnational distribution of investment is of consequence for both academics and policy makers.

Suggested Citation

  • Steven Samford & Priscila Ortega G�mez, 2014. "Subnational politics and foreign direct investment in Mexico," Review of International Political Economy, Taylor & Francis Journals, vol. 21(2), pages 467-496, April.
    • Handle: RePEc:taf:rripxx:v:21:y:2014:i:2:p:467-496
    DOI: 10.1080/09692290.2012.733316
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    References listed on IDEAS

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    1. John H. Dunning & Sarianna M. Lundan, 2008. "Multinational Enterprises and the Global Economy, Second Edition," Books, Edward Elgar Publishing, number 3215.
    2. Mr. George T. Abed & Mr. Hamid R Davoodi, 2000. "Corruption, Structural Reforms, and Economic Performance in the Transition Economies," IMF Working Papers 2000/132, International Monetary Fund.
    3. Dussel Peters, Enrique, 2000. "La inversión extranjera en México," Desarrollo Productivo 4462, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    Cited by:

    1. Alper Yılmaz, 2024. "Do Geopolitical Risks and Political Stability Drive Foreign Direct Investments? New Evidence from Dynamic Panel CS-ARDL Model," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 9(1), pages 61-87.
    2. Samford, Steven, 2022. "Decentralization and local industrial policy in Mexico," World Development, Elsevier, vol. 158(C).
    3. Chan, Christine M. & Du, Jialin, 2022. "Formal institution deficiencies and informal institution substitution: MNC foreign ownership choice in emerging economy," Journal of Business Research, Elsevier, vol. 142(C), pages 744-761.

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