Teoría de las Relaciones Humanas

7.4.1 Attractiveness of States

The choice of an investment location depends, first of all, on firm-specific considerations. Depending on the primary motive of FDI (e.g. proximity to the market, availability of competitive labour, proximity to natural resources etc.), different locations may be seen as optimal. If proximity to the market is a key motive, the firm will likely chose a location where a cluster of customer industries exists or where most consumers are. Some cursory descriptions of the economic characteristics of major regions have already been given (see Section 3.2), although it goes without saying that individual market research and visits to the regions will be necessary before a firm will be able to decide on a location.

In a survey we conducted among the members of the Mexican-Swiss Business Association (AEMS; http://www.aems.com.mx;
11.7) in late 2001, we included questions on the perceived location qualities of the different Mexican regions. Each firm had been asked to recommend up to four states which offer a particularly favourable investment climate for international investors. We asked respondents to name the

Change in patents granted to residents 13 (% change)

GDP and energy consumption 14 (real GDP growth minus energy

consumption growth)

Computer power 14 (worldwide share of MIPS)

Electricity costs for industrial clients 15 (USD/kWh)

Air transportation 15 (number of passengers carried)

Table 7.4: Input Factor ”Infrastructure” (Category rank: 42)

Strongest Criteria Rank Weakest Criteria Rank

Development and application 48 of technology is constrained by legal environment

Technical co-operation is lacking 48 betwen companies

Science not adequately taught 47 in schools

Basic research does not enhance 46 long-term economic and

technological development

main location advantages and disadvantages of the respective states. The emerging picture is very clear.

• No. 1: Nuevo León/Monterrey

The state of ”Nuevo Leon” in the North of the country has been named most frequently. It is particularly the area around Monterrey that offers favourable investment conditions. The strongest arguments in favour of locating in Nuevo Léon are the state’s proximity to the U.S. – Mexico’s major export market – and the availability of well-qualified personnel with high work ethics. Indeed, some of the largest Mexican corporations have their headquarters in Monterrey, and many international firms choose to establish their Mexican business presence there.

The entrepreneurial Norteños (i.e. the population in the North of Mexico) like to see themselves as different from other Mexicans, and there is indeed more than just geographic proximity to the U.S.: Business culture is more focused and sober than in the rest of the country. Additionally, the good infrastructure of the region is often cited as a major advantage. The region hosts what is probably Mexico’s most prestigious academic institution for technical and commercial studies, the ”Tec de Monterrey”. Finally, public security and corruption seem to be much less of an issue in Monterrey than in the capital. In light of the above, it is no surprise that the region has been very successful in attracting FDI in recent years.

The limiting factors of Nuevo Léon as an investment location are basically the scarcity of water (also common in other parts of the country), above-average living and production costs as well as the extreme climate with very hot summers and cold winters. The long distance to and from Mexico City which continues to be the economic heart of the country is perceived as another disadvantage.

By the way, the particular location advantages of Monterrey are not shared by all other areas along the border with the U.S. that have also experienced strong growth and FDI inflows over the past decade: Monterrey was one of the first industrialised areas in Latin America, and the agglomeration bases its competitive advantage on a century-old industrial tradition

”Monterrey is

Mexico’s Milan

whereas Mexico

City is its Rome.”

traditions and a supportive business culture. By contrast, many agglomerations in the ”Maquiladora belt” along the border with the U.S. have mushroomed only in the last three decades, helped by government programmes to foster the Maquiladora industry (see Section 7.6) which are oriented mainly towards the U.S. market and which do not have economic hinterland in Mexico. Social cohesion is said to be lower in these agglomerations which are characterised by high migration and a strong influence of economic cycles.

• No. 2: Querétaro, Guanajuato, Aguascalientes

Second on the list of popular locations is a number of states located a few hours driving North of the Federal District, along the ”NAFTA highway”, which goes from Mexico-City to the United States. These are the states of Querétaro, Guanajuato and Aguascalientes.

All three have become favourite investment locations in recent years. An advantage is their central location (close to Mexico-City and Guadalajara and en route to Monterrey and the U.S.) and their good infrastructure. They have become particularly popular among the automotive and automotive parts industry. The availability of land and workforce, the efficient administrations of these states and the high quality of life in the region have been cited as reasons for investing there.

• No. 3: Federal District, México, Puebla, Tlaxcala, Hidalgo

In third position, the Federal District and the nearby states of México, Puebla, Tlaxcala and Hidalgo are mentioned. The Federal District draws its attractiveness from being the country’s major market and its political and cultural centre. However, traffic congestion, high environmental contamination, a lack of space, long distances between home and work and problems with public security etc. are the price to pay. Many firms therefore prefer to establish a business presence in the nearby states where investors may enjoy the proximity to the Federal District’s market without having to incur respective problems.

The Southern states have not been particularly mentioned as preferred locations for the establishment of a business presence. More information on the economic regions of Mexico may be found in Section 3.2.

Section 11.5 contains a complete listing of Mexican states. For each state, we have specified the addresses of the government, the economic development department and the representation in the Federal District.

7.4.2 Industrial Parks

Much of FDI has flown into industrial parks in recent years. More than one half of all firms in industrial parks are foreign-owned. Mostly built by private site developers, industrial parks offer generally good conditions for FDI. The noteworthy advantages include modern facilities with good infrastructure and accessibility, a better-than-average provision of water and electricity (partially through own facilities) and access to advanced telecommunications infrastructures. The administration of an industrial park is usually acquainted with the particular needs of foreign investors and the challenges they face, and they can assist a foreign investor in bureaucratic proceedings. Often, other foreign firms will have invested in the same park before which makes it easier for newcomers to establish contact and to benefit from other foreign firms’ experiences.

More information on industrial parks in Mexico is available from the Mexican Association of Private Industrial Parks (Asociación Mexicana de Parques Industriales Privados; AMPIP; http://www.ampip.org.mx;
11.15) or the Mexican System for the Promotion of Industrial Parks of the Ministry of the Economy (Sistema Mexicano de Promoción de Parques Industriales; SIMPPI; accessible through http://www.siem.gob.mx or http://www.spice.gob.mx). A list of industrial parks and their addresses is also available in a publication by Bancomext (”Costos Industriales en México – ”Una Guía para el Inversionista Extranjero”; see bibliography in Chapter 12) which may be downloaded from the internet (see info block in Section 7.7.3 for further instructions).

Photogr

apher:

Jean-Pierre

V