Analysis of the Main Determinants of Industrial Agglomeration: The Case of Japanese Automotive FDI in Mexico
DOI:
https://doi.org/10.32870/mycp.v9i27.682Keywords:
FDI, Japanese, industrial agglomeration determinants, spatial analysis, Mexican automotive sectorAbstract
The current research analyses the agglomeration behavior of Japanese Foreign Direct Investment in Mexico’s automotive sector in the Bajio region. The study employs unpublished data obtained from Mexico’s Secretariat of Economy. The database is used to carry out the empirical analysis using spatial econometric techniques and test the presence of spatial dependence in the variables of the model. According to the results, Gross Domestic Product (GDP) per capita, labor force, transportation infrastructure, and geographical distance explain Japanese FDI agglomeration in Mexico’s Bajio region. The results also elucidate that economic similarities within entities may help attract investment in similar proportions to neighboring states. Additionally, positive spatial effects from Japanese FDI were found, suggesting that an increase in Japanese FDI in one state is followed by increments of Japanese investment in neighboring states. This may be evidence of horizontal cooperation and a result of Japanese firms taking advantage of scale economies and the development of specialized labor markets and suppliers in the Bajio region.Downloads
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