| Summary: | This dissertation presents an integrated-empirical analysis of the relationship between Foreign Direct Investment (FDI) and the entrepreneurial activity in Mexico. The bulk of the literature has focused its attention on measuring FDI's effects on economic growth across countries using secondary data at the macro level, but it has neglected the analysis for Latin American countries, particularly; it has neglected the analysis of FDI's effects on the entrepreneurial activity; and the factors that foster or hinder the entrepreneurial activity in an open-market system, at the institutional level.In this work I present evidence that supports the hypothesis that FDI is positive and significant correlated with economic growth but only when economic growth is presented as a linear function of FDI. I also present evidence that contest the hypothesis that FDI is positive correlated with the creation of new firms, particularly for a setting in which the host country's economic structure is heavily characterized by micro and small low-tech-firms, as it is the case in Mexico. However, I also present evidence that supports the findings of previous studies regarding external and internal factors affecting individuals who are willing to take risks and to become entrepreneurs across regions. This integrated approach is based on the use of different methodological tools that helped me to explore the factors affecting the entrepreneurial activity in Mexico, both at different economic sectors, and at different regional levels.I argue that each potential entrepreneur faces different environmental constraints and personal limitations (external and internal factors) when is about to start a new venture, such differences are subject to personal traits, and to the institutional context in which the future entrepreneur interacts. I found that there are similar institutional constraints across Mexican states affecting the rate of new firms' creation; I also found that individuals - entrepreneurs - across Mexican States differ in their willingness to take risks depending upon their geographic location. I will also discuss how these differences and similarities across Mexican States raise important implications for public policy toward the development of a new entrepreneurial class in the country.
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