Spatial Determinants of Japanese FDI Location in Mexico
DOI:
https://doi.org/10.32870/mycp.v6i17.526Keywords:
Japanese FDI, Location Factors, Spatial Analysis.Abstract
The present research examines regional characteristics and spatial effects that determine the industrial location decision of Japanese Foreign Direct Investment (JFDI) in Mexico at a state level. Using a unique dataset, the observations showed a concentration of Japanese firms in the center, northeast and northwest regions in Mexico, with presence of a “low-low” type of clustering measured through a local spatial autocorrelation test. Results from different econometric model specifications show that Japanese firms prefer more populous areas with vast labor pools. Also, contrary to previous findings, transportation infrastructure seems to be deterrent for Japanese firm location, which might be due to a preference for greenfield location sites.Additionally, under some specifications Japanese firms seem to prefer states that are strategically located closer to the U. S., and locations with a more manageable workforce. Finally, after conducting diagnostics, a strong spatial dependence was found in the error terms meaning that either Japanese firm presence is affecting the location of other Japanese firms in neighboring states that are above of what is considered “normal” levels, or the model might be exhibiting the absence of a variable with spatial characteristics that is not accounted for in the specifications.Downloads
References
Anselin, L. (1988). Spatial Econometrics: Methods and Models. The Netherlands: Kluwer Academic Publishers.
Aoki, M. (1990). Toward an 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.
Assuncao, S., Forte, R. and Teixeira, A. (2011). Location Determinants of fdi: A Literature Review. Fep Working Papers, No. 433, October.
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: 10.1006/jjie.2001.0491
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.
Cámara Japonesa de Comercio e Industria. (2015). Cámara Japonesa de Comercio e Industria Directorio 2015. México: Cámara Japonesa de Comercio e Industria.
Cassidy, J. F. and Andreosso-O’Callaghan, B. (2006). Spatial Determinants of Japanese fdi in China. Japan and the World Economy, 18(4): 512-527.
Chan, C., Makino, S. and Isobe, T. (2006). Interdependent Behavior in Foreign Direct Investment: The Multi-level Effects of Prior Entry and Prior Exit on Foreign Market Entry. Journal of International Business Studies, 37(5): 642-665.
Cheng, S. and Stough, R. R. (2006). Location Decisions of Japanese New Manufacturing Plants in China: a Discrete-choice Analysis. Annals of Regional Science, 40(2): 369-387. doi: 10.1007/s00168-005-0052-4
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.
Dunning, J. H. and Lundan, S. M. (2008). Theories of Foreign Direct Investment. In J. H. Dunning and S. M. Lundan (Org.), Multinational Enterprises and the Global Economy (pp. 79-115). Cheltenham: Edward Elgar Publishing Ltd.
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.
Guimaraes, 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.
Guzman-Anaya, L. (2013). Are Productivity Spillovers from Japanese fdi Larger than U. S. fdi? Inter-industry Evidence from Mexico. México: Universidad de Guadalajara.
Guzman-Anaya, L. (2015). Localization Factors from Japanese Firms in Automotive-related Industries in Mexico. Procedia Economics and Finance, No. 30, pp. 223-247. doi: 10.1016/S2212-5671(15)01294-0
Head, K. C., Ries, J. C. and Swenson, D. L. (1995). Agglomeration Benefits and Location Choice: Evidence from Japanese Manufacturing Investments in the United States. Journal of International Economics, No. 38, pp. 223-247.
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.
Inegi. (2010). Estados Unidos Mexicanos. Censo de Población y Vivienda 2010. México: inegi.
Inegi. (2013). Anuario estadístico y geográfico por entidad federativa 2013. México: inegi.
Jordaan, J. A. (2009). Foreign Direct Investment, Agglomeration and Externalities. England: Ashgate.
Kakihara, T. and Guzman-Anaya, L. (2014). Factores de localización de la inversión extranjera directa japonesa en México. In T. Okabe and S. Carrillo (Eds.), Relaciones México-Japón en el contexto del Acuerdo de Asociación Económica (pp. 135-179). México: Juan Pablos Editor.
Lesage, J. and Pace, K. R. (2009). Introduction to Spatial Econometrics. United States: crc Press.
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, No. 18, pp. 223-245.
Mair, A., Florida, R. and Kenney, M. (1988). The New Geography of Automobile Production: Japanese Transplants in North America. Economic Geography, 64(4): 352-373.
Romero, Q. L. and Andrés-Rosales, R. (2014). Técnicas modernas de análisis regional. México: Plaza y Valdés.
Secretaría de Economía. (2015). Estadística oficial de los flujos de ied hacia México. Retrieved from: www.economia.gob.mx/comunidad-negocios/competitividad-normatividad/inversion-extranjera-directa. [Accessed: December 4, 2015].
Secretaría de Economía. (2016). Siem estadísticas por entidad federativa y actividad. Retrieved from: www.economia.gob.mx/comunidad-negocios/competitividadnormatividad/inversion-extranjera-directa. [Accessed: June 20, 2016].
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.
Toyo Keizai. (2014). Kaigai Shinshutsu Kigyou Souran-Kuni Betsu. Tokyo: Toyo Keizai.
Toyo Keizai. (2015). Kaigai Shinshutsu Kigyou Souran-Kuni Betsu. Tokyo: Toyo Keizai.
Wakasugi, R. (2005). The Effects of Chinese Regional Conditions on the Location Choice of Japanese Affiliates. The Japanese Economic Review, 56(4):390-407. doi: 10.1111/j.1468-5876.2005.00337.x
Woodward, D. (1992). Locational Determinants of Japanese Start-ups in the United States. Southern Economic Journal, No. 58, pp. 690-708. doi: 10.2307/1059836
Zaheer, S. (1995). Overcoming the Liability of Foreignness. Academy of Management Journal, 38(2): 341-363. doi: 10.2307/256683
Zhou, C., Delios, A., and Yang J. Y. (2002). Location Determinants of Japanese Foreign Direct Investment in China. Asia Pacific Journal of Management, No. 19, pp. 63-86. doi: 10.1023/A:1014839607180
Published
Issue
Section
License
Open Access Policy
This journal provides open access to all its contents, in adherence to the principle that making research freely available supports a greater global exchange of knowledge.
MyCP is licensed under a Creative Commons Attribution-NonCommercial license, also known as CC BY-NC.
Contents are published in both PDF and XML formats.
Authors who publish in México y la Cuenca del Pacífico must accept the following conditions:
Pursuant to Mexican copyright laws, México y la Cuenca del Pacífico acknowledges and respects the authors’ moral right and ownership of property rights, which will be assigned to the University of Guadalajara to publish the articles in an open-access mode.
México y la Cuenca del Pacífico does not charge the authors any fees for receiving and processing their articles.
Authors are permitted to enter into other independent and additional contractual agreements for the non-exclusive distribution of the article version published in México y la Cuenca del Pacífico (for example, publishing it in an institutional repository or in other printed or electronic media) as long as they clearly state that the piece was originally published in México y la Cuenca del Pacífico.
Pursuant to the above, once the article is approved for publication, authors must send the Assignment of Rights Agreement form duly filled and signed. This form must be sent to mexicoylacuenca@gmail.com as a PDF file.
Readers/users of México y la Cuenca del Pacífico can freely access the journal new issues as soon as they are uploaded. Readers/users are allowed to cite, share (both electronically and physically), print and distribute the material, provided they expressly state that the work was originally published in México y la Cuenca del Pacífico. Contents are to be properly cited and never for commercial purposes.
