Foregin Direct Investment to low-cost coutries - A theoretical and practical study

Sammanfattning: Many Swedish manufacturing companies expand their production to low cost countries through different types of foreign direct investments in an attempt to reduce costs. Mexico is one of these low cost countries and is becoming a more and more feasible alternative to Swedish companies. The reasons for this lie in different country specific factors such as closeness to the US, the Maquiladora industry and of course the low labour costs. The purpose of our dissertation has been to find correspondence between a number of well-known internationalisation theories and some internationalised Swedish companies. This dissertation presents different Mexico specific factors to consider before an expansion such as education level, the Mexican business culture and infrastructure. Briefly, our conclusions are that we could not find any correlation between the internationalisation theories and the interviewed companies. We also found the Mexican market attractive for Swedish investors. However, there are a number of issues that have to be regarded in order to be successful in Mexico. Keywords: foreign direct investment, low cost countries, Swedish manufacturing companies, internationalisation theories, Mexican business environment