State-level Location Determinants of Japanese Automotive FDI in Mexico

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