Location Determinants of Japanese Automotive FDI in Mexican States, 2013-2018: Determinantes de localización estatal de la inversión extranjera directa japonesa en la industria automotriz mexicana

Leo Guzmán-Anaya; María Guadalupe Lugo-Sánchez

doi:10.29105/ensayos42.2-3

Authors

Leo Guzmán-Anaya Departamento de Recursos Humanos, CUCEA, Universidad de Guadalajara https://orcid.org/0000-0002-5682-3175
María Guadalupe Lugo-Sánchez Departamento de Recursos Humanos, CUCEA, Universidad de Guadalajara https://orcid.org/0000-0001-7765-8968

DOI:

https://doi.org/10.29105/ensayos42.2-3

Keywords:

Japanese Foreign Direct Investment, Spatial Analysis, Location Determinants, Automotive Industry

Abstract

Foreign Direct Investment (FDI) location theories highlight the regional factors that influence the location and spatial distribution of the investment project. The study employs a state-level spatial panel econometric model to empirically contrast the main location factors that influence the spatial distribution of Japanese companies. The main results indicate that state characteristics related to the presence of infrastructure, lower wages, agglomeration, and development of the automotive industry influence the presence of Japanese automotive firms in Mexico. The results also highlight the presence of negative spatial externalities for the wages, population, industry agglomeration, and education variables. This shows that neighboring states compete for the arrival of Japanese automotive firms and spatial effects are present. Positive spatial externalities were observed from the market size variable, which can reflect the presence of production networks in the automotive industry, especially for the case of Japanese firms.

Downloads

Download data is not yet available.

Author Biographies

Leo Guzmán-Anaya, Departamento de Recursos Humanos, CUCEA, Universidad de Guadalajara

El Dr. Leo Guzmán Anaya es profesor investigador de la Universidad de Guadalajara (CUCEA) y miembro del Sistema Nacional de Investigadores (Nivel I). Sus intereses de investigación se orientan al área de Economía Internacional con especial interés en la integración de proveeduría local, derrames inter-industriales y factores de localización asociados a la inversión extranjera directa.

En su trayectoria académica ha participado en proyectos de investigación intra e inter-institucionales, publicado artículos científicos en revistas indexadas nacionales e internacionales y capítulos de libro con editoriales reconocidas. Además, ha participado como ponente en conferencias internacionales, organizado seminarios internacionales y realizado estancias académicas en Universidades en Japón. También ha sido consultado por parte de agencias gubernamentales de México y Japón en temas relacionados con inversión japonesa en México.

María Guadalupe Lugo-Sánchez , Departamento de Recursos Humanos, CUCEA, Universidad de Guadalajara

La Dra. María Guadalupe Lugo Sánchez es Doctora en Políticas Públicas y Desarrollo con más de 7 años en experiencia docente en cursos de Posgrado y Licenciatura. Actualmente es profesora del Departamento de Recursos Humanos de la Universidad de Guadalajara (CUCEA). Su área de interés de investigación es el intercambio comercial entre México y Japón y cuenta con experiencia en el análisis y evaluación del Acuerdo de Asociación Económica México – Japón empleando herramientas de análisis cualitativo y cuantitativo.

References

Anselin, L. (1988). Spatial Econometrics: Methods and Models. London, England: Kluwer. DOI: https://doi.org/10.1007/978-94-015-7799-1

Anselin, L. (1995). “Local indicators of spatial association”. Geographical Analysis, 27(2), 93–115. DOI: https://doi.org/10.1111/j.1538-4632.1995.tb00338.x

Aoki, M. (1990). “Toward and Economic Model of the Japanese Firm”. Journal of Economic Literature, 28(1), 1-27.

Asanuma, B. (1989). “Manufacturer-supplier Relationships in Japan and the Concept of Relation Specific Skill”. Journal of the Japanese and International Economies, 3(1), 1-30. DOI: https://doi.org/10.1016/0889-1583(89)90029-4

Ashby, N., and Ramos, M. (2013). “Foreign Direct Investment and Industry Response to Organized Crime: The Mexican Case”. European Journal of Political Economy, 30, 80-91. DOI: https://doi.org/10.1016/j.ejpoleco.2013.01.006

Assunção, S., Forte, R., and Teixeira, A. A. C. (2011). “Location Determinants of FDI: a Literature Review”. FEP Working Papers, (433), 23–67. doi: 10.1057/9781403907493_2 DOI: https://doi.org/10.1057/9781403907493_2

Belderbos, R, and Carree, M. (2002). “The Location of Japanese Investments in China: Agglomeration Effects, Keiretsu and Firm Heterogeneity”. Journal of the Japanese and International Economies, 16(2), 194-211. DOI: https://doi.org/10.1006/jjie.2001.0491

Belotti, F., Hughes, G., and Mortari, A. P. (2017). “Spatial Panel-data Models Using Stata”. Stata Journal, 17(1), 139-180. DOI: https://doi.org/10.1177/1536867X1701700109

Blanc-Brude, F., Cookson, G., Piesse, J., and Strange, R. (2014). “The FDI Location Decision: Distance and the Effects of Spatial Dependence”. International Business Review, 23(4), 797-810. DOI: https://doi.org/10.1016/j.ibusrev.2013.12.002

Cabral, R., Mollick, A., and Saucedo, E. (2018). “The Impact of Crime and Other Economic Forces on Mexico’s Foreign Direct Investment Flows”. Banco de México Working Papers, 2018-24, 1-37. DOI: https://doi.org/10.1111/coep.12401

Caves, R. (1996). Multinational Firms and Economic Analysis. Cambridge, England: Cambridge University Press.

Coughlin, C., Terza, J. V., and Arromdee, V. (1991). “State Characteristics and the Location of Foreign Direct Investment in the United States”. The Review of Economics and Statistics, 73(4), 675-678. DOI: https://doi.org/10.2307/2109406

De Castro, P. G., Aparecida, F. E., and Carvalho, C. A. (2013). “The Determinants of Foreign Direct Investment in Brazil and Mexico: An Empirical Analysis”. Procedia Economics and Finance, 5, 231-240. DOI: https://doi.org/10.1016/S2212-5671(13)00029-4

Dunning, J. H. (1998). “Location and the Multinational enterprise: A neglected factor”. Journal of International Business Studies, 29(1), 46-66. DOI: https://doi.org/10.1057/palgrave.jibs.8490024

Dunning, J. H. (2002) Trade, Location of Economic Activity and the Multinational Enterprise: A Search for an Eclectic Approach. In Dunning, J. H. (Ed.), Theories and Paradigms of International Business Activity – the Selected Essays of John H. Dunning (52-76). Cheltenham: Edward Elgar Publishing Limited.

Dunning, J. H., and Lundan, S. M. (2008). Theories of Foreign Direct Investment. In Dunning, J. H., and Lundan, S. M. (Eds.), Multinational Enterprises and the Global Economy (79-115). Cheltenham: Edward Elgar Publishing Limited.

Elhorst, J. P. (2010). “Applied Spatial Econometrics: Raising the Bar”. Spatial Economic Analysis, 5, 9-28. DOI: https://doi.org/10.1080/17421770903541772

Escobar, O. (2013). “Foreign direct investment (FDI) determinants and spatial spillovers across Mexico’s states”. The Journal of International Trade and Economic Development, 22(7), 993-1012. DOI: https://doi.org/10.1080/09638199.2011.624190

Faeth, I. (2009). “Determinants of Foreign Direct Investment – A Tale of Nine Theoretical Models”. Journal of Economic Surveys, 23(1), 165-196. DOI: https://doi.org/10.1111/j.1467-6419.2008.00560.x

Fanbasten, N., and Göstas Escobar, A. (2016). Determinants of Foreign Direct Investment: A panel data analysis of the MINT countries. (Master’s Thesis). Department of Business Studies, Uppsala University.

Fonseca, F. and Llamosas-Rosas, I. (2019). “Spatial Linkages and Third-region Effects: Evidence from Manufacturing FDI in Mexico”. The Annals of Regional Science, 62, 265-284. https://doi.org/10.1007/s00168-019-00895-1 DOI: https://doi.org/10.1007/s00168-019-00895-1

Friedman, J., Hung-Gay, F., Gerlowski, D. A., and Silberman, J. (1996). “A note on ‘State Characteristics and the Location Choice of Foreign Direct Investment within the United States’”. The Review of Economics and Statistics, 78(2), 367-368. DOI: https://doi.org/10.2307/2109943

Garriga, A. (2017). “Inversión extranjera directa en México: comparación entre la inversión procedente de los estados unidos y del resto del mundo”. Foro Internacional, 57(2), 318-320. DOI: https://doi.org/10.24201/fi.v57i228.2429

Guan, H., and Li, Q. (2021). “Spatial Spillover Effects of Economic Growth Based on High- Speed Railways in Northeast China”. Complexity, (2021), 1-11. doi: https://doi.org/10.1155/2021/8831325 DOI: https://doi.org/10.1155/2021/8831325

Guimares, P., Figueiredo, O., and Woodward, D. (2000). “Agglomeration and the location of Foreign Direct Investment in Portugal”, Journal of Urban Economics, 47(1), 115-135. DOI: https://doi.org/10.1006/juec.1999.2138

Guzman-Anaya, L. (2017). “Spatial Determinants of Japanese FDI Location in Mexico”, México y la Cuenca del Pacífico, 17, 13-35. DOI: https://doi.org/10.32870/mycp.v6i17.526

Haining, R.P. (2001). “Spatial Autocorrelation”. In Neil J. Smelser and Paul B. Baltes (Eds.). International Encyclopedia of the Social & Behavioral Sciences. Pergamon. https://doi.org/10.1016/B0-08-043076-7/02511-0. DOI: https://doi.org/10.1016/B0-08-043076-7/02511-0

Head, K. C., Ries, J. C., and Swenson, D. L. (1999). “Attracting Foreign Manufacturing: Investment Promotion and Agglomeration”. Regional Science and Urban Economics, 29(2), 197-218. DOI: https://doi.org/10.1016/S0166-0462(98)00029-5

Ietto-Gillies, G., (2005). Transnational Corporations and International Production: Concepts, Theories and Effects. Cheltenham: Edward Elgar Publishing.

INEGI (2020a). “Encuesta Mensual de la Industria Manufacturera”. Instituto Nacional de Geografía y Estadística. México: Instituto Nacional de Geografía y Estadística.

INEGI (2020b). “Producto Interno Bruto de las Actividades Económicas por Entidad Federativa”. Instituto Nacional de Geografía y Estadística. México: Instituto Nacional de Geografía y Estadística.

INEGI (2020c). “Censo de Población y Vivienda 2020”. Instituto Nacional de Geografía y Estadística. México: Instituto Nacional de Geografía y Estadística.

Jordaan, J. A., (2009). Foreign Direct Investment, Agglomeration and Externalities. England: Ashgate.

Juarez, R., and Angeles, C. (2013). “Foreign Direct Investment in Mexico Determinants and its Effects on Income Inequality”. Contaduría y Administración, 58(4), 201-222. DOI: https://doi.org/10.1016/S0186-1042(13)71239-7

Lesage, J., and Pace, R. (2009) “Introduction to Spatial Econometrics”. New York: Chapman and Hall. DOI: https://doi.org/10.1201/9781420064254

Luger, M., and Shetty, S. (1985). “Determinants of Foreign Plant Start-ups in the United States: Lessons for Policy Makers in the Southeast”. Vanderbilt Journal of Transnational Law, 18, 223-245.

Lugo-Sanchez, M. G. (2018). “The Role of Public Policies in Attracting Japanese FDI in Mexico”. In Falck Reyes, M. and Guzmán-Anaya, L. (Eds.). Japanese Direct Investment in Mexico’s Transport Equipment Sector. Macro Impact and Local Responses (81-102). Singapore: Springer. DOI: https://doi.org/10.1007/978-981-10-7718-0_5

Lugo-Sanchez, M. G. (2022). The Role of Public Policies, Agglomeration and the Keiretsu in the Spatial Distribution of Japanese Automotive Production Networks in Mexico’s Bajio Region 2016-2020. (Doctoral Thesis). Centro Universitario de Ciencias Económico Administrativas, Universidad de Guadalajara.

Mollick, A. V., Ramos-Duran, R., and Silva-Ochoa, E. (2006). “Infrastructure and FDI Inflows into Mexico: A Panel Data Approach”. Global Economy Journal, 6(1), 1-27. DOI: https://doi.org/10.2202/1524-5861.1094

Mughal, M. M., and Akram, M. (2011). “Does market size affect FDI? The Case of Pakistan”. Interdisciplinary Journal of Contemporary Research in Business, 2(9), 237-247.

Ortega, P. G., and Infante, Z. J. (2016). “Determinantes de la inversión extranjera directa en la región de la Cuenca del Pacífico”. México y la Cuenca del Pacífico, 5(14), 79-102. DOI: https://doi.org/10.32870/mycp.v5i14.507

Peng, M. (2009). Institutions, Cultures and Ethics. In Peng, M. (Ed.), Global Strategic Management (90-122). Cincinnati: South-Western Cengage Learning.

RNIE (2020). “Registro Nacional de Inversión Extranjera Directa”. Secretaría de Economía. México: Secretaría de Economía.

RNIE (2022). “Registro Nacional de Inversión Extranjera Directa”. Secretaría de Economía. México: Secretaría de Economía.

Romero, M.E. (2020). “La Cooperación japonesa para el desarrollo. El estado de Guanajuato en México, donde los objetivos del sector publico y privado se encuentran”. Revista Administración Pública y Sociedad, 9, 66-86.

Romero, Q. L., and Andres-Rosales, R. (2014). Técnicas Modernas de Análisis Regional. México:Plaza y Valdés.

Samford, S., and Ortega, P. G. (2012). “Subnational Politics and Foreign Direct Investment in Mexico”. Review of International Political Economy, 21(2), 467-492. DOI: https://doi.org/10.1080/09692290.2012.733316

SE (2020). “Información estadística general de flujos de IED hacia México desde 1999”. Secretaría de Economía. México: Secretaría de Economía. Available in: <.https://datos.gob.mx/busca/dataset/informacion-estadistica-de-la-inversion-extranjera-directa/resource/06ad9dbb-cbd2-4b17-9586-daf78326308a >.

Smith, D. F., and Florida, R. (1994). “Agglomeration and Industrial Location: An Econometric Analysis of Japanese-Affiliated Manufacturing Establishments in Automotive-Related Industries”. Journal of Urban Economics, 36(1), 23-41. DOI: https://doi.org/10.1006/juec.1994.1024

SESNSP (2023). “Datos abiertos de incidencia delictiva”. Secretariado Ejecutivo del Sistema Nacional de Seguridad Pública. Available in: <https://www.gob.mx/sesnsp/acciones-y-programas/datos-abiertos-de-incidencia-delictiva?state=published.>.

Toyo Keizai (2015) “Kaigai Shinshutsu Kigyou Souran-Kuni Betsu”. Toyo Keizai. Tokyo, Japan: Toyo Keizai.

Toyo Keizai (2017) “Kaigai Shinshutsu Kigyou Souran-Kuni Betsu”. Toyo Keizai. Tokyo, Japan: Toyo Keizai.

Toyo Keizai (2020) “Kaigai Shinshutsu Kigyou Souran-Kuni Betsu”. Toyo Keizai. Tokyo, Japan: Toyo Keizai.

Woodward, D. (1992) “Locational Determinants of Japanese Start-ups in the United States”. Southern Economic Journal, 58, 690-708. DOI: https://doi.org/10.2307/1059836

Zaheer, S. (1995) “Overcoming the Liability of Foreignness”. Academy of Management Journal, 19(1), 63-86. DOI: https://doi.org/10.2307/256683