José Carlos Osorio Pineda.

Multinational Corporations in Mexico: A first mapping.

Mexico is a country that, after being opened to international markets by late 70’s and
early 80’s, has known how to welcome and place several foreign direct investments
among many economic activity sections.

Within this foreign investment are located the cases of multinational enterprises.
These kinds of enterprises are characterized by owning a share of foreign capital
among its constitution, that is to say that they have economic participation in more
than one single country and, moreover, it can operate and coordinates many
different side-enterprises from headquarters, which are commonly away, in a certain
key location, where the actual enterprises belong.

From these kinds of enterprises there are a few different classifications:

 Multinational as subsidiary: In this first phase of internationalization, firms are

looking after placing head-quarter’s replicas in foreign countries.
 Multinational as an exporter filial: Here, the enterprises, are get their
production to other countries through stablishing factories dedicated to goods
and services exportation.
 Multinational as a global enterprise: When the enterprise is in this category,
the multinationals are focused in high-added value functions, moreover that
they promote investigation and development.

In Mexico, multinationals have become a huge way of contribution and self-activating

the economic sector, by 2008 it was calculated that 34,535 enterprises were running
with foreign capital, among these, some that are likely to stand out are Wal-Mart and
automotive ones.

Talking about location of enterprises, it’s important to point that most of them are
placed in the center-west of Mexico, including 66% of all enterprises, the other 34%
are placed in the upper frontier with U.S.A. This means that only 11 states are
concentrating 93% of all firms, leading Ciudad de Mexico.

Of all the enterprises placed in Mexico, there is a sub-category that is focused in the
economic activity which is being done. Most of multinationals are dedicated to
manufacturing, although a crucial percentage belongs to services section.
The sub-category dedicated to automotive has registered a greater quantity of
innovation and development in productive processes, and has condensed a big part
of direct foreign investment made by the multinationals.

Speaking of economic sectors activity in multinationals, it’s important to point out the
quantity of capital invested and which are directed to production. Mexico is the 14 th
country when it comes to receiving direct foreign investment, place which is related
to its 13th place among all economies in the world. These capital is designated in
Mexico for three principal areas: The research of natural resources, the research of
newest markets, the exploration of new strategy and technological actives and
inquiring about operative and working efficiency.

All these facts determine a special condition of multinational enterprises. Generating

work force, which approximates to 3,443 average work places occupied, although it
doesn’t guarantee that work conditions are the best.

Remember that multinational enterprises are expanded for two essential reasons:
Getting into a new potential market and increasing its income while they reduce its
costs.

This logic will last in MNC’s, because they will look after cheapest and most qualified
work force, most accessible economic politics and the country with plenty of natural
resources to exploit, thus they’ll generate greater incomes.

It’s here when it could be seen a huge contrast among enterprises, firstly focused to
innovation and development, and the working conditions and society. On first hand
enterprises promote increasing wealth by greater work force and generating
opportunities for the active economic section, nevertheless, they don’t really care
about worker’s condition, making their effort cheaper and reducing their incomes.

Finally, it could be said that there is a lack of specialized studies which are more
detailed and which could provide sustainable alternatives that boost foreign capital
placing without affecting by one or another way to the society which they interact
with. Maybe, by simple Pareto’s theory (1848-1923), -which talks about the utility
theory-, it is impossible to produce something without affecting another person,
although, politic economic could be strengthened to favor the social conditions for
those who really are the force and capital of multinationals, without requiring to avoid
such an important economic contribution.
Bibliography.
Carrillo, Jorge; Gomis, Redi., (2009), “Corporaciones Multinacionales en México: Un
primer mapeo.”, El Colegio de la Frontera Norte, 47 pp.