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The selected MNE that has invested in Mexico is Samsung. Samsung is a multinational organization based out of Samsung Town, Seoul - South Korea. Samsung first capitalized in United States in 1980s, when the firm was devotedly investing in research and development capacities as this was pivotal to push the business to the forefront of global business industry. As of 2012, the company invested over $ US31 billion at its semiconductor profiting facility in Austin – Texas. One of the advantage that Samsung was seeking in investing in the United States was to get access to latest technological advancement and R&D facilities as this can help their business to develop and prosper globally. The second advantage that Samsung considered was an increased access to the largest consumer market in the world to which it can sell to earn the profit. Samsung also invested in pioneering the production of world’s best semiconductors and chips by which it is still ruling the sphere. The company has made heavy investments in Silicon Valley and is the biggest supplier of chips and semiconductors across the globe (Samsung Ventures n.d.).
One of the advantage of investing in Mexico is the low labor costs (as low as China) and better productivity as compared to China. Mexico exported three times more electronics in 2013 as compared to 2006, which brings in the revenues of around $78 billion. This is the reason that electronics giant like Sony, Sharp, LG etc. are increasingly investing in Mexico to exploit the benefits of having similar production and labor cost as it is in China while getting better levels of productivity (McCarthy n.d.).
Another advantage offered by Mexico is associated with the significant economic boost to U.S economy, which has made Mexico one of the most lucrative and productive markets of the country. U.S has become the 3rd largest trade and business partner of Mexico accounting for approximately $507 billion for imports and exports. In 2014, U.S imports goods of around $280 million, which is even higher than the amount imported by Mexico from U.S i.e. $26 million. This shows that investing in the production in Mexico will not only provide the benefits of low cost and high productivity but will also benefit the investors to get the access to one of the largest consumer market and business economy across the globe (Orr n.d.)
Works Cited
Deborah Orr. The Largest Foreign Investments In The U.S. Forbes. 2016. Web. July 26, 2016 < http://www.forbes.com/2008/04/10/foreign-investment-stocks-2000global08-biz-cx_do_0410investments.html>
Samsung Ventures. Samsung is actively investing in future-oriented businesses. Official Website. 2016. Web. July 26, 2016 < http://www.samsungventures.com/>
Timothy McCarthy. 5 Reasons to Invest in Mexico. US News. 2014. Web. July 26, 2016. <http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2014/09/22/5-reasons-to-invest-in-mexico>
