Abstract
With the debt crisis of the 1980s, an economic transition began, replacing import substitution industrialization, with the aim of adopting a series of structural reforms as a new model of economic growth. In order to obtain the benefits associated with investment, governments in developing countries relaxed their barriers to foreign investment flows and actively promote the attraction of FDI through the provision of subsidies and tax incentives. In the empirical literature, four factors are identified as determinants of the FDI location decision: regional demand, regional production costs, regional policies and the regional presence of agglomeration economies. Studies focused on public policies as a determinant factor for the location of FDI in developing countries are relatively scarce. This study is focused on the fiscal policies offered by the Bajio states, and their role in attracting Japanese foreign direct investment in the automotive industry.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Mexico has a network of 12 Free Trade Agreements with 46 countries, 32 Reciprocal Investment Promotion and Protection Agreements (RIPPAS) and 9 Trade Agreements (Economic Complementation and Partial Scope Agreements) within the framework of the Latin American Integration Association (ALADI). Secretariat of Economy.
- 2.
Secretariat of Economy.
- 3.
The Financial Times.
- 4.
- 5.
Economic corridors in Guanajuato with presence of companies in the automotive industry:
-
1.
Corredor Silao – San Felipe – Pueblos del Rincon.
-
2.
Corredor de la Carretera Federal 57.
-
3.
Corredor de la Carretera Federal 45.
-
4.
Corredor Celaya – Acambaro.
-
5.
Corredor Irapuato – Penjamo.
-
6.
Corredor San Miguel de Allende – Dolores Hidalgo – Guanajuato.
-
1.
- 6.
Due to the nature of the negotiations, representatives of the companies that were interviewed were not allowed to disclose the terms or details of negotiations. In other cases, the interviewee ignored the details of the negotiation for not being present during that process.
References
Brown Grossman, F. (1999). La industria de autopartes mexicana: Reestructuración reciente y perspectivas. División de desarrollo productivo y empresarial de la comisión económica para América Latina y el Caribe centro internacional de investigación para el desarrollo.
Canfei, H. (2006). Regional descentralisation and location of foreign direct investment in China. Post-Communist Economies, 18, 33–50.
Cassidy, J., & Andreosso-O’Callaghan, B. (2006). Spatial determinants of Japanese FDI in China. Japan and the World Economy, 18(4), 512–527.
Cheng, L. K., & Kwan, Y. K. (2000). What are the determinants of the location of foreign direct investment? The Chinese experience. Journal of International Economics, 51(2), 379–400.
Dussel Peters, E. (2000). La inversión extranjera en México. Serie Desarrollo Productivo (pp. 1–103).
Dussel Peters, E., Galindo Paliza, L., Loria, E., & Mortimore, M. (2007). La inversión extranjera directa en México: desempeño y potencial. México: Siglo veintiuno editores.
Falck-Reyes, M. (2012). Japanese foreign direct investment in Mexico and the impact of the global crisis. Journal of Globalization Competitiveness and Governability, 6(1), 36–54.
Fujita, K., & Hill, R. (1995). Global toyotaism and local development international. Journal of Urban and Regional Research, 19(1), 7–22.
Gurria, J. (1994). Flujos de capital: el caso de México. Serie Financiamiento del Desarrollo CEPAL, 27.
Guzman-Anaya, L. (2015). Localization factors from Japanese firms in automotive- related industries in Mexico. Procedia Economics and Finance, 30(2015), 265–270.
Hahm, S., & Heo, U. (2008). U.S. and the Japanese foreign direct investment in East Asia: A comparative analysis. The Policy Studies Journal, 36(6), 119–133.
Head, C., Ries, J. C., & Swenson, D. L. (1999). Attracting foreign manufacturing: Investment promotion and agglomeration. Regional Science and Urban Economics, 29(2), 197–218.
Hines, J. (1996). Altered states: Taxes and the location of foreign direct investment in America. The American Economic Review, 86(5), 1076–1094.
Hyun, J. (2008). A comparative analysis of transplants and industrial location of Japanese and Korean automotive industries in Europe. International Journal of Business, 13, 216–238.
IMCO. Un puente entre dos Méxicos. (2016). Índice de Competitividad Estatal.
JETRO-México. (2004). Relaciones Económicas México-Japón. México City: JETRO México.
Jordaan, J. (2009). Foreign direct investment, agglomeration and externalities: Empirical evidence from Mexican manufacturing industries (pp. 1–211). London/New York: Routledge.
Kojima, K. (1985). Japanese and American direct investment in Asia: A comparative analysis. Hitotsubashi Journal of Economics, 25, 1–20.
Kumaran, G. (2008). Role of multinational corporations in automobile industries: A comparative study between India and Mexico. PORTES, revista mexicana de estudios sobre la Cuenca del Pacífico, 2(3), 131–163.
Lee, K., Hwang, S., & Lee, M. (2012). Agglomeration economies and location choice of Korean manufacturers within the United States. Applied Economics, 44(2), 189–200.
Little, J. (1978, July/August de). Location decisions of foreign direct investors in the United States. New England Economic Review, 18, 43–63.
Luger, M., & Shetty, S. (1985). Determinants of foreign plant start-ups in the United States: Lessons for policymakers in the southeast. Vanderbilt Journal of Transnational Law, 18(2), 223–245.
Lugo-Sanchez, M. G. (2015). Economic partnership agreement Mexico – Japan: Trade creation or trade diversion. Revista Green Paper, 1–25.
ProMéxico. (2014). Automotive industry. México, D.F.: ProMéxico.
ProMéxico. (2015). The Mexican automotive industry: Leading the world. México, D.F.: ProMéxico.
Smith, D., & 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.
Tokunaga, S., Kageyama, M., Akune, Y., & Nakamura, R. (2014). Empirical analysis of agglomeration economies in the Japanese assembly type manufacturing industry for 1985–2000: Using agglomeration and coagglomeration indices. Review of Urban and Regional Development Studies, 26, 57–81.
Uwaoma, G. (2012). Essays on spatial analysis of foreign direct investment and economic growth determinants in developing countries. Dissertations, 33, 1–24.
Woodward, D. (1992). Locational determinants of Japanese manufacturing start- ups in the United States. Southern Economic Journal, 58(3), 690–708.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Lugo-Sanchez, M.G. (2018). The Role of Public Policies in Attracting Japanese FDI in Mexico. In: Falck-Reyes, M., Guzman-Anaya, L. (eds) Japanese Direct Investment in Mexico's Transport Equipment Sector. New Frontiers in Regional Science: Asian Perspectives, vol 22. Springer, Singapore. https://doi.org/10.1007/978-981-10-7718-0_5
Download citation
DOI: https://doi.org/10.1007/978-981-10-7718-0_5
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-10-7717-3
Online ISBN: 978-981-10-7718-0
eBook Packages: Economics and FinanceEconomics and Finance (R0)