Partisan politics and foreign direct investment: subnational dynamics in Mexico

Abstract

This dissertation examines the political economy of foreign direct investment (FDI) in Mexico, a context marked by stark subnational disparities. Building upon established literature, it explores the economic and political determinants of foreign investment, with a particular emphasis on party political partisanship. A theoretical framework is developed to assess how factors of production, namely labor and capital, can mediate partisan incentives towards FDI. Empirical evidence from a panel regression analysis supports the hypothesis that left-wing parties attract significantly higher levels of FDI, a relationship that is strengthened when factoring labor abundance. These results offer critical insights into the intersection of electoral politics and its impact on economic outcomes.