Spatial Clustering of Foreign Direct Investment: The Case of Japanese Automotive Suppliers in Mexico

The arrival of Japanese investment in the Mexican automotive industry has caused an increase in the economic dynamism of the Bajio region, especially since the entry into force of the Mexico-Japan Economic Partnership Agreement in 2005. Previous research has been conducted from different perspectives explaining the spatial distribution and agglomeration of Japanese enterprises in host countries; however, studies that employ measurements of spatial clustering for Japanese firms are still scarce. For the present research, a unique spatial georeferenced database of Japanese automotive suppliers was created to identify the clustering patterns of firms. The results suggest that Japanese automotive supplier firms in Mexico favor spatial proximity. The use of spatial measurements of concentration provides evidence to further understand the presence of agglomeration of Japanese firms in the automotive industry.