Foreign direct investment (FDI) determinants and spatial spillovers across Mexico's states

This article studies the location pattern of foreign direct investment (FDI) in Mexico for the period 1994–2004. An empirical model is specified based on recent FDI theories. This model is estimated using state-level data and employing spatial econometric techniques. Results suggest that higher education levels and lower delinquency rates are important determinants to attract FDI. Results also suggest a relationship of complementarity between inbound FDI to the host state and inward FDI to its neighboring states.