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This research analyzes the effects of Foreign Direct Investment
(FDI) on Mexican retail. To do so, the US company Wal-Mart is
studied in relation to its impact on three major Mexican retailers.
Over the last twenty years, Mexico's economy has experienced
substantial changes. During the 1980s, an Exports-Oriented
Industrialization (EOI) model replaced the Imports-Substitution
model that Mexico followed for several decades. According to the
rationale of the EOI model, FDI should be seen as a key element
that provides access to new technology, organizational upgrading
and capital to the receiving economy. In sum, FDI has been critical
for the Mexican economic model in recent years. For retail, the
findings of this research indicate that Wal-Mart's entry into the
Mexican market has led to the modernization of the sector. However,
Wal-Mart's entry also reinforced the elimination process of many
Mexican retailers and suppliers. Crucially, there is no substantial
evidence that foreign participation in Mexican retail has triggered
significant benefits for the Mexican population in terms of lower
prices and better jobs in the industry.
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