Abstract

TORRES PRECIADO, Víctor Hugo; POLANCO GAYTAN, Mayrén  and  VENEGAS MARTINEZ, Francisco. Criminal activity and private investment in Mexico: a spatial perspective, 1997-2010. Pap. poblac [online]. 2015, vol.21, n.83, pp.203-251. ISSN 2448-7147.

The aim of this investigation is to analyse the effects of criminal activity on private investment among states in Mexico. To achieve this task, we propose a simple economic model that relates crime and investment, and explicitly considers spatial interactions effects. We perform the empirical analysis by applying the spatial data analysis methodology that consists of three components: exploratory analysis, graphical visualization and spatial econometric modelling. In particular, we estimate a Spatial Durbin Model that allows accounting for the presence of possible spatial crime diffusion effects. Our results suggest that crime exerts a negative effect on the demand for investment in Mexico, particularly those related with patrimonial crimes, and that homicides are possible cause of investment relocation.

Keywords : Criminal activity; private investment; spatial econometrics.

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