Foreign Direct Investment, Agglomeration and Externalities: Empirical Evidence from Mexican Manufacturing Industries
By critically appraising current theories of both Foreign Direct Investment (FDI) and agglomeration, this book explores the variety of links that exist between these two externality-creating phenomena. Using in-depth empirical research on Mexico, Jacob Jordaan constructs and analyzes several datasets on Mexican manufacturing industries at various geographical scales, creating innovative models on FDI externalities that incorporate explicitly regional considerations. The empirical findings identify both direct FDI spillover effects as well as the effects of agglomeration on these externalities. In extension of this, the analysis also contains analysis of FDI productivity effects that arise through inter-firm linkages between FDI and local Mexican suppliers.
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absorptive capacity agglomeration and FDI agglomeration economies agglomerations of economic analysis backward linkages Blomstrom border chapter coefficient dataset Developed Plant level differences between FDI dimensions of FDI domestic firms Driffield economic activity empirical findings estimated effect estimating regression model estimations of FDI evidence externality effects FDI and Mexican FDI firms FDI location FDI participation FDI spillovers foreign direct investment foreign-owned firms geographical proximity growth effects host economy import substitution industry agglomeration industry foreign participation inter-industry FDI interaction variables intra intra-industry foreign participation Jordaan knowledge spillovers Kokko large technological differences level of absorptive manufacturing firms maquiladora firms material inputs materialise Mexican economy Mexican firms Mexican suppliers Mexico City negative effect negative FDI externalities Nuevo Leon panel data pecuniary externalities positive effect positive externalities positive FDI externalities present production services regional growth regional industry regional level regional presence regression model share spatial dimensions spatial FDI effects Table technology gap trade liberalisation