Foreign direct investment and technology spillovers in Mexico: 20 years of NAFTA

  • Enrique Armas Instituto de Investigaciones Económicas y Empresariales (Economic and Business Research Institute) Universidad Michoacana de San Nicolás de Hidalgo
  • José Carlos Rodríguez Instituto de Investigaciones Económicas y Empresariales (Economic and Business Research Institute) Universidad Michoacana de San Nicolás de Hidalgo http://orcid.org/0000-0002-0942-8017
Keywords: Foreign direct investment, technology transfer, technology spillovers, trade liberalisation, North America Free Trade Agreement, Mexico

Abstract

This article analyses the development of technology capabilities in the manufacturing sector of Mexico during the last two decades. It has been argued that the inclusion of Mexico in the North America Free Trade Agreement (NAFTA) in 1994 would be enough to catch up with Canada and the United States. In this regard, trade liberalisation and foreign direct investment (FDI) would have been two strategic tools to close the technology gap between Mexico and its commercial partners in North America. Yet, after twenty years of NAFTA, it has been demonstrated that many indigenous firms in Mexico must develop an absorptive capacity to benefit from FDI. This paper suggests that the debate on the Asian miracle in the 1990s could be an adequate theoretical framework to discuss technology development and industrialisation in the case of emerging economies. In fact, this debate reveals two alternative approaches to explain the development of technology capabilities: (i) the accumulation view of growth, and (ii) the assimilation view of growth. Therefore, the Asian miracle exemplifies how entrepreneurship, learning and a supporting innovation policy could be an adequate strategy to benefit from FDI and technology spillovers in the case of emerging economies.

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Author Biography

José Carlos Rodríguez, Instituto de Investigaciones Económicas y Empresariales (Economic and Business Research Institute) Universidad Michoacana de San Nicolás de Hidalgo
Professor José Carlos Rodríguez graduated from Université du Québec à Montréal (UQÀM) in Canada. His research interests are in innovation and technology management, international business and strategy, and system dynamics modeling. Professor Rodríguez is Director of Instituto de Investigaciones Económicas y Empresariales (Economic and Business Research Institute, ININEE) of Universidad Michoacana de San Nicolás de Hidalgo in Mexico. He has got other appointments as a Visiting Researcher at Institut National de la Recherche Scientifique (INRS) in Canada, and a Professor at Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM) and Centro de Investigación y Docencia Económicas (CIDE) in Mexico.
Published
2017-10-26
How to Cite
Armas, E., & Rodríguez, J. C. (2017). Foreign direct investment and technology spillovers in Mexico: 20 years of NAFTA. Journal of Technology Management & Innovation, 12(3), 34-47. https://doi.org/10.4067/S0718-27242017000300004
Section
Research Articles