Japanese Foreign Direct Investment in Mexico and the Impact of the Global Crisis

Abstract

This paper aims to analyze the evolution and main characteristics of Japanese Foreign Direct Investment in Mexico, since Japan has been the main source of investment in Mexico coming from Asia. Attracted by Mexico´s liberalization trade policy since the eighties, Japanese subsi- diaries already established in the United States transferred some of their production activities into Mexico, contributing to the leading automotive and electronic exporting sectors. Both the North American Free Trade Agreement and the Japan-Mexico Economic Partnership Agree- ment have incentivized the location of Japanese plants in Mexico. Given the concentration of Japanese Foreign Direct Investment in the manufacturing exporting sector, it is playing a role in the formation of production networks with connections not only to North America but to Asian countries as well.