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Host country corruption level and Foreign Direct Investments inflows

Author

Listed:
  • Albert Wijeweera
  • Brian Dollery

Abstract

This paper investigates the effects of corruption on Foreign Direct Investment (FDI) inflows controlling other relevant determinants using a panel data approach for 45 countries over 1997-2004. Whereas economic theory suggests that corruption should discourage FDI, many notably corrupt countries receive substantial FDI – an anomaly worthy of investigation. In common with other empirical work, we find no statistically significant impact of corruption on FDI. This suggests that policies designed to attract additional foreign FDI should focus on other determinants of investment rather than on the intractable problem of reducing the level of corruption.

Suggested Citation

  • Albert Wijeweera & Brian Dollery, 2009. "Host country corruption level and Foreign Direct Investments inflows," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 2(2), pages 168-178.
  • Handle: RePEc:ids:ijtrgm:v:2:y:2009:i:2:p:168-178
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    Citations

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    Cited by:

    1. Jonas Kleineick & Andrea Ascani & Martijn Smit, 2020. "Multinational investments across Europe: a multilevel analysis," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 40(1), pages 67-105, April.
    2. Blanco, Luisa R., 2012. "The Spatial Interdependence of FDI in Latin America," World Development, Elsevier, vol. 40(7), pages 1337-1351.
    3. Asamoah, Michael Effah & Adjasi, Charles K.D. & Alhassan, Abdul Latif, 2016. "Macroeconomic uncertainty, foreign direct investment and institutional quality: Evidence from Sub-Saharan Africa," Economic Systems, Elsevier, vol. 40(4), pages 612-621.
    4. Yixing Yang & Md. Qamruzzaman & Mohd Ziaur Rehman & Salma Karim, 2021. "Do Tourism and Institutional Quality Asymmetrically Effects on FDI Sustainability in BIMSTEC Countries: An Application of ARDL, CS-ARDL, NARDL, and Asymmetric Causality Test," Sustainability, MDPI, vol. 13(17), pages 1-29, September.
    5. Imtiaz Arif & Lubna Khan & Sundus Waqar, 2023. "Does Corruption Sand or Grease the Wheels? A Case of BRICS Countries," Global Business Review, International Management Institute, vol. 24(6), pages 1468-1481, December.

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