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Regional Foreign Participation and Externalities: New Empirical Evidence from Mexican Regions

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  • Jacob A Jordaan

    (Faculty of Economics and Business Administration, Free University of Amsterdam, De Boelelaan 1105, 1081 HV, Amsterdam, The Netherlands)

Abstract

Recent empirical research on externalities from foreign direct investment (FDI) is engaged with the identification of externalities along the dimensions of industry and geographical space. In this paper I explore these externality dimensions in the context of estimating FDI externalities in regional Mexican manufacturing industries. The main findings indicate that the presence of FDI creates a variety of externality effects. Intraregional foreign participation creates negative intraindustry and positive interindustry externalities. Furthermore, the estimations identify negative intraindustry externalities across regions and positive spatial interindustry FDI externalities. In addition, the estimations identify three different regional characteristics that have a negative or positive effect on spatial externalities from FDI.

Suggested Citation

  • Jacob A Jordaan, 2008. "Regional Foreign Participation and Externalities: New Empirical Evidence from Mexican Regions," Environment and Planning A, , vol. 40(12), pages 2948-2969, December.
    • Handle: RePEc:sae:envira:v:40:y:2008:i:12:p:2948-2969
    DOI: 10.1068/a39206
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    3. Jordaan, Jacob A., 2011. "FDI, Local Sourcing, and Supportive Linkages with Domestic Suppliers: The Case of Monterrey, Mexico," World Development, Elsevier, vol. 39(4), pages 620-632, April.
    4. Syeda Tamkeen Fatima, 2016. "Productivity spillovers from foreign direct investment: evidence from Turkish micro-level data," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(3), pages 291-324, June.
    5. Santos, Eleonora & Khan, Shahed, 2018. "Determinant Factors of Pecuniary Externalities," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6(8), pages 180-198.
    6. Ezcurra, Roberto & Rodríguez-Pose, Andrés, 2013. "Does Economic Globalization affect Regional Inequality? A Cross-country Analysis," World Development, Elsevier, vol. 52(C), pages 92-103.
    7. Monastiriotis, Vassilis, 2016. "Institutional proximity and the size and geography of FDI spillovers: do European firms generate more favourable productivity spillovers in the EU neighbourhood?," LSE Research Online Documents on Economics 66141, London School of Economics and Political Science, LSE Library.
    8. Iršová, Zuzana & Havránek, Tomáš, 2013. "Determinants of Horizontal Spillovers from FDI: Evidence from a Large Meta-Analysis," World Development, Elsevier, vol. 42(C), pages 1-15.
    9. Andrés Rodríguez-Pose, 2012. "Trade and Regional Inequality," Economic Geography, Taylor & Francis Journals, vol. 88(2), pages 109-136, April.
    10. Tomáš Havránek & Zuzana Iršová, 2011. "How to Stir Up FDI Spillovers: Evidence from a Large Meta-Analysis," Working Papers IES 2011/34, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Oct 2011.
    11. Santos, Eleonora, 2017. "Externalities from FDI on domestic firms’ Productivity: A Literature Review for Developed Countries," MPRA Paper 88958, University Library of Munich, Germany.
    12. Richard Perkins & Eric Neumayer, 2010. "Geographic Variations in the Early Diffusion of Corporate Voluntary Standards: Comparing ISO 14001 and the Global Compact," Environment and Planning A, , vol. 42(2), pages 347-365, February.
    13. Jordaan, Jacob A., 2008. "Intra- and Inter-industry Externalities from Foreign Direct Investment in the Mexican Manufacturing Sector: New Evidence from Mexican Regions," World Development, Elsevier, vol. 36(12), pages 2838-2854, December.
    14. Tomas Havranek & Zuzana Irsova, 2012. "Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers," Journal of Development Studies, Taylor & Francis Journals, vol. 48(10), pages 1375-1396, October.
    15. Jordaan,Jacob Arie & Douw,Willem & Qiang,Zhenwei, 2020. "Multinational Corporation Affiliates, Backward Linkages, and Productivity Spillovers in Developing and Emerging Economies : Evidence and Policy Making," Policy Research Working Paper Series 9364, The World Bank.

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