The Role of Japanese Foreign Direct Investment in Production Networks in Mexico and Thailand. The Transport Equipment Sector


Discussion paper by Melba Falck Reyes,  visiting Research Fellow, The Center for Integrated Area Studies, Kyoto University




Fragmentation of Production and foreign investment by global Multinationals have played a major role in the formation of regional production networks increasing the flows of trade in intermediate goods among nations and fostering local procurement in the host countries. From the point of view of the host country, this flow of investment can be an opportunity for Small and Medium Enterprises (SMEs) to join the global chains of production and become more competitive.

Mexico and Thailand had become, in their respective regions, ma jor players in the automotive industry network and Japanese investment has played an important role in this outcome. This paper looks at t he impact of Japanese FDI in the formation of such networks.


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