High‐Profile Attacks, Regimes of Criminal Governance and Foreign Direct Investment in Mexico

J. Eduardo Ibarra‐Olivo, Sandra Ley and Covadonga Meseguer

The World Economy, 2025, vol. 48, issue 7, 1732-1752

Abstract: This paper examines the influence of high‐profile attacks (HPAs) on foreign direct investment (FDI) in Mexican municipalities. HPAs target political officials and signal attempts by organised criminal groups (OCGs) to dominate the local organisation of the communities under their influence. Such efforts to establish criminal governance controls can potentially create a stable environment conducive to FDI. Using a data set on HPAs and analysing their impact on sectoral FDI at the municipal level between 2007 and 2013 in Mexico, we find that HPAs do not discourage foreign investment. However, this effect depends on whether the establishment of criminal governance occurs amid widespread violence. Under conditions of generalised violence, the stabilising influence of HPAs has a negative effect on FDI, especially in the commerce and service sectors. Our findings offer new insights into the conditions under which organised crime affects FDI, contributing to an ongoing debate.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/twec.13723

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:48:y:2025:i:7:p:1732-1752

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0378-5920

Access Statistics for this article

The World Economy is currently edited by David Greenaway

More articles in The World Economy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().