Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240665 
Year of Publication: 
2018
Series/Report no.: 
Working Papers No. 2018-24
Publisher: 
Banco de México, Ciudad de México
Abstract: 
This paper examines the effect of different crimes on Foreign Direct Investment (FDI) inflows into the 32 Mexican states. Using a state-quarter panel data for the period 2005 to 2015, we estimate alternative models of FDI, with fixed effects throughout a flexible lag-lengths methodology and System Generalized Method of Moments (SGMM) models in order to identify the determinants of FDI inflows into the country. The dependent variable in our model is the annual inflow of FDI and the independent variables are state level indicators (real wages and electricity consumption), and macroeconomic forces (the real exchange rate and interest rate). We find that homicides and thefts have negative statistically significant effects on FDI, while other crimes show no effects. Partitions of the sample suggest higher negative effects in the most violent states.
Subjects: 
Crime
Foreign Direct Investment
Mexico
Panel Data
JEL: 
C33
F21
F52
P45
Document Type: 
Working Paper
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