Keyword

Foreign direct investment, regional competitiveness, insecurity, state GDP, territorial inequality, Mexican regions.

Abstract

Foreign direct investment (FDI) is a key indicator of regional economic dynamism, especially in countries characterized by structural disparities such as Mexico. This study examines the relationship between foreign direct investment (FDI) inflows received by Mexican states and variables including Gross Domestic Product (GDP), perceived insecurity, regional competitiveness, and geographic location. A multiple linear regression model was applied to data from 2019 to 2023, incorporating regional dummy variables to capture location-specific effects.

The results reveal a clear and consistent advantage for northern regions—particularly the Northeast, Northwest, and North Center—in attracting investment, even after controlling for GDP levels, insecurity perception, and competitiveness. These regions concentrate on the highest FDI inflows and display positive and relevant coefficients in the model, suggesting a more favorable institutional, economic, and logistical environment. In contrast, regions such as the South Center, Southwest, and Southeast exhibit negative or statistically weak coefficients, pointing to a lower structural capacity to attract capital. This may be attributed to longstanding limitations in infrastructure, connectivity, political stability, and institutional development.

This pattern reflects a well-documented trend in economic literature: the persistent territorial inequality between northern and southern Mexico. Such disparity stems from both historical legacies of centralized development models and the lack of continuity in public policies aimed at regional advancement. The study confirms that geographic location is not merely a spatial variable but an economic determinant perpetuating investment distribution asymmetries. Therefore, it is essential to promote regionally differentiated development strategies that not only enhance competitiveness indicators in the south but also foster institutional and security conditions conducive to sustained national and foreign investment.


Full Text : PDF
References
  • Aguila-Retureta, J. (2015). *Regional disparities and industrial clusters in Mexico.* Mexico City: UNAM.

  • Botello; Juan (2025). *The role of state competitiveness and perceived insecurity in attracting foreign direct investment in Mexico*, IJBED , Volume 13 Issue 01

  • Christaller, W. (1933). *Central places in Southern Germany.* Jena: Gustav Fischer.
  • Fujita, M. (1996). Economics of agglomeration. *Journal of the Japanese and International Economies, 10*(4), 339–378.
  • Hamel, G. (1985). *The multinational corporation and global production strategies.* Cambridge: Harvard Business School Press.
  • Henderson, J.V., Kuncoro, A., & Turner, M. (1992). Industrial development and the concentration of manufacturing. *The Review of Economic Studies, 59*(3), 479–496.
  • Instituto Mexicano para la Competitividad (IMCO). (2023). *Competitiveness Index 2023.* Mexico City: IMCO.
  • Instituto Nacional de Estadística y Geografía (INEGI). (2023). *Foreign Direct Investment Data 2019–2023.* Mexico City: INEGI.
  • Jordaan, J.A. (2024). *Industrial agglomeration and regional inequality in Mexico: 1950–2019.* Mexico City: El Colegio de México.
  • Krugman, P. (1991). *Geography and trade.* Cambridge: MIT Press.
  • Krugman, P. (1999). The role of scale economies in economic geography. *International Economic Review, 40*(2), 223–247.
  • Manet, C. (2014). *Urban economies and globalization.* Paris: OECD Publishing.
  • Myrdal, G. (1957). *Economic theory and underdeveloped regions.* London: Duckworth.
  • Office of the United States Trade Representative (USTR). (2020). *United States–Mexico–Canada Agreement (USMCA).* Washington, D.C.: USTR.
  • Perroux, F. (1955). Note sur la notion de “pôle de croissance.” *Économie Appliquée, 8*(1), 307–320.
  • Puga, D. (1999). The rise and fall of regional inequalities. *European Economic Review, 43*(2), 303–334.
  • Rodríguez-Oreggia, E. (2005). Regional disparities and economic growth in Mexico. *World Development, 33*(3), 513–530.
  • Thünen, J.H. von. (1966). *Isolated state: An analysis of agriculture and economics.* Oxford: Pergamon Press.  Weber, A. (1909). *Theory of the location of industries.* Chicago: University of Chicago Press. Wolman, H. (2010). Clusters and regional inequality. *Economic Development Quarterly, 24*(1), 23–36.