IBS Departmental Research Meeting - Eduardo Ibarra-Olivio - The ‘Internationalising Region’: Determinants of Region-Sector Outward FDI from Mexico

You are cordially invited to attend an International Business and Strategy Departmental Research Meeting, during which there will be a presentation by Eduardo Ibarra Olivio, Henley Business School. A reminder that attendance for IBS (full time, research oriented) staff and full-time students is compulsory, and where possible, must be in person. Individuals unable to attend in person, due to legitimate reasons will be provided a Teams link on request. Non-IBS staff are welcome to attend, but must register prior to the event. If you have not received the email invite please email Angie Clark

Please join us in Room 108, Henley Business School, if you would like to attend, please register using the link below:

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Please make sure you let me know in advance if you intend to attend in person so that the correct amount of catering is booked.

Date: Wednesday 21st February 2024, HBS Room 108

Time: 13.00 - 14.15pm

Abstract:

This paper investigates the internationalisation of Mexican subnational regions through outward foreign direct investment (OFDI), focusing on: (i) the regional propensity to engage in OFDI; (ii) the volume of regional OFDI; and (iii) how (i) and (ii) change depending on the geographical destination of OFDI. The conceptual framework, drawn on different literatures, considers four complementary categories of regional determinants driving OFDI: innovation capacity and competence base; international openness; public financial support to internationalisation; and industrial structure. The empirical analysis uses data on the OFDI of 32 Mexican regions in eight economic sectors observed over the years 2006-2017. The main findings highlight that regional financial support is key to overcome home-region disadvantages deterring local firms’ from engaging in OFDI, irrespective of its vertical or horizontal nature. Regions with higher skills show more propensity to investment in advanced high-income countries, responding to a learning region model. However, the regional extent of engagement abroad confirms the negative association between internationalisation and local innovation systems, supporting the view of OFDI driven by home region disadvantages particularly when targeting advanced economies