Foreign Investment in Mexico

Foreign Investment in Mexico

Introduction

It is an obvious fact that there have been structural reforms with the neoliberal adjustment to the economy of Mexico with the advent of globalization. Today, the Mexican economy shows interdependence (rather dependence) with the global economy, but especially with developed economies, especially with the United States. Moreover, what happens in Mexico can affect the entire global economy, particularly the U.S. Impairment in the ability to involve elements of a subjective or objective are both linked to the real and symbolic economy. The global economy affects Mexico by the characteristics of the economic model that was launched. For this model, exports are the engine of the economy and foreign capital is the real holder of the investment. Simultaneously, the support of international organizations, expressed in signed agreements, the loans granted and opinions that pour into the country's economy, sometimes determined, sometimes condition, economic policy and the behavior of foreign capital into Mexico.

Outside opinions do not refer only to the economy, but also influence both policy and expectations. Mexico has in turn its ability to affect the international economy by at least two reasons: first because of its strong international borrowing, given this, its insolvency (which was on the verge of occurring in early 1995) would hit roughly in real terms, but especially according to expectations, the U.S. financial sector and other overseas countries. Second, Mexico has been filed and the same has been offered, as a sort of paradigm of what emerging economies must do to be successful in globalization.

Discussion

Flows of Foreign Investment

Flows of foreign investment, both portfolio and direct, can be significant from several perspectives. From a macroeconomic perspective or balance of payments flows, foreign investment may be relevant to allow a deficit in checking account or even to service debt external, among other cases. Foreign investment can then serve as an important lever for external funding respective economy. It is important to consider in this context that regardless of the specific form of foreign investment - either direct or portfolio in its various forms - as long by definition require an external service varies temporary, whether of profits, dividends and / or steep outflows of foreign portfolio investment, among others.

On the other hand, foreign investment, particularly the direct form, also has an impact at the enterprise level and organizational industry locally, regionally and nationally. This can have a positive effect on efficiency and productivity of the companies, and in the local socio-economic, regional and national levels (Looney, 1998). The implementation of new technologies, processes and standards, organizational forms, intra-and Inter-linking of intra and inter-as well as integration and economic and social network can lead to impacts that are emerging not necessarily from a macroeconomic perspective. The potential effects on the process of learning, economies of scale and economies of range (economics of scope) have been highlighted by many authors.

It is important to note that foreign investment cannot only be considered from the prospect of receiving economic ...