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Digging in the dirt? Extractive industry FDI and corruption

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  • Ivar Kolstad

    ()

  • Arne Wiig

    ()

Abstract

Does corruption attract or deter foreign investment in the extractive sectors? This article presents an econometric analysis of extractive industry foreign direct investment (FDI) inflows to 81 countries in the period 1996–2009. The results suggest that increased corruption within a country is associated with increased extractive industry FDI, but at a diminishing rate as corruption increases grow larger. For realistic changes in corruption, however, more corruption is associated with more extractive industry investment. Copyright Springer-Verlag Berlin Heidelberg 2013

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File URL: http://hdl.handle.net/10.1007/s10101-013-0133-2
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Bibliographic Info

Article provided by Springer in its journal Economics of Governance.

Volume (Year): 14 (2013)
Issue (Month): 4 (November)
Pages: 369-383

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Handle: RePEc:spr:ecogov:v:14:y:2013:i:4:p:369-383

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Related research

Keywords: Corruption; Governance; Mining; Quarrying; Petroleum; Extractive industries; B23; D73; N50;

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References

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  1. Chakrabarti, Avik, 2001. "The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross-Country Regressions," Kyklos, Wiley Blackwell, vol. 54(1), pages 89-113.
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  9. Ivar Kolstad & Arne Wiig, 2009. "What determines Chinese outward FDI?," CMI Working Papers 3, CMI (Chr. Michelsen Institute), Bergen, Norway.
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  13. Peter J. Buckley, 2008. "Do we need a special theory of foreign direct investment for extractive industries?," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 1(2), pages 93-104, December.
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