Foreign Direct Investment and Corruption in Developing Economies: Evidence form Linear and Non-Linear Panel Causality Tests
AbstractThis paper aims at determining the causal relationship between FDI and corruption in 42 developing countries using linear and non linear panel methods over the period 1998 to 2009. The findings show a causal association as corruption appears to Granger caused FDI and FDI seems to Granger lead corruption using linear methods, while for weaker results are obtain using non linear methods. The general value of these results is that adequate institutional facilities must be in place in developing economies to reduce losses from corruption especially in an attempt to attract foreign direct investment.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40933.
Date of creation: 2011
Date of revision:
Panel Linear and Non-Linear Causality; Corruption; Foreign Direct Investment;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
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