Competitiveness, perception of insecurity, and location: Key factors in the regional distribution of foreign investment in Mexico

Foreign direct investment (FDI) is a key indicator of regional economic dynamism, especially in countries characterized by structural disparities such as Mexico. This study examines the relationship between foreign direct investment (FDI) inflows received by Mexican states and variables including Gross Domestic Product (GDP), perceived insecurity, regional competitiveness, and geographic location. A multiple linear regression model was applied to data from 2019 to 2023, incorporating regional dummy variables to capture location-specific effects.

The results reveal a clear and consistent advantage for northern regions—particularly the Northeast, Northwest, and North Center—in attracting investment, even after controlling for GDP levels, insecurity perception, and competitiveness. These regions concentrate on the highest FDI inflows and display positive and relevant coefficients in the model, suggesting a more favorable institutional, economic, and logistical environment. In contrast, regions such as the South Center, Southwest, and Southeast exhibit negative or statistically weak coefficients, pointing to a lower structural capacity to attract capital. This may be attributed to longstanding limitations in infrastructure, connectivity, political stability, and institutional development.

This pattern reflects a well-documented trend in economic literature: the persistent territorial inequality between northern and southern Mexico. Such disparity stems from both historical legacies of centralized development models and the lack of continuity in public policies aimed at regional advancement. The study confirms that geographic location is not merely a spatial variable but an economic determinant perpetuating investment distribution asymmetries. Therefore, it is essential to promote regionally differentiated development strategies that not only enhance competitiveness indicators in the south but also foster institutional and security conditions conducive to sustained national and foreign investment.