The role of state competitiveness and perceived insecurity in attracting foreign direct investment in Mexico

State competitiveness is a key factor influencing a country's capacity to attract foreign direct investment (FDI), as it reflects the efficiency of institutions, infrastructure, macroeconomic stability, and innovation capacity, among others. In Mexico, the Mexican Institute for Competitiveness (IMCO) is responsible for measuring and analyzing state competitiveness through its State Competitiveness Index, which evaluates factors such as economic stability, governance, innovation, and security conditions.This study explores how state competitiveness and perceived insecurity impact the attraction of Foreign Direct Investment (FDI) across Mexican states, using a comprehensive model that incorporates key variables such as state competitiveness, perception of insecurity, political party in power, and GDP. Based on data from 2019 to 2023, the analysis reveals that the State Competitiveness Index is the most significant predictor of FDI, exhibiting a positive relationship with new investments. This indicates that higher state competitiveness tends to attract more foreign investments. Additionally, the Perception of Insecurity Index demonstrates a significant, albeit smaller, effect on FDI, suggesting that increased insecurity perception can still influence investment flows, though to a lesser extent. These findings underscore the complex dynamics between security perceptions, competitiveness, and foreign investment, providing valuable insights for policymakers aiming to enhance investment attraction strategies.