Foreign Direct Investment (FDI) Determinants and Spatial Spillovers Across Mexico's States
28 Pages Posted: 10 Jul 2013
Date Written: February 20, 2012
This paper studies the location pattern of Foreign Direct Investment (FDI) in Mexico for the period 1994-2004. An empirical model is specified based on recent FDI theories. This model is estimated using state-level data and employing spatial econometric techniques. Results suggest that higher education levels and lower delinquency rates are important determinants to attract FDI. Results also suggest a relationship of complementarity between inbound FDI to the host state and inward FDI to its neighboring states.
Keywords: FDI, Mexico, NAFTA, Spatial econometrics
JEL Classification: C29, F21, F23, O54
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