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Whether corruption sands or greases the wheels of foreign direct investment: a meta-regression analysis

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  • Adem Gök

    (Kırklareli University)

Abstract

As a deficient form of governance, corruption hinders FDI by increasing transaction costs and uncertainty. However, the heterogeneity in findings reported from primary studies has made testing competing hypotheses about the role of corruption on FDI difficult. The paper aims to identify and, if any, measure the authentic empirical effect of corruption on FDI by conducting a meta-regression analysis based upon 616 estimation results from 81 studies. The result suggests a negative authentic empirical effect of corruption on FDI supporting the hypothesis of corruption sands the wheels of foreign direct investment. The marginal effect of corruption changes in direction and magnitude due to the type of FDI (stocks or flows), the corruption index, the estimation technique, the unit, and the time period, used in the primary studies.

Suggested Citation

  • Adem Gök, 2023. "Whether corruption sands or greases the wheels of foreign direct investment: a meta-regression analysis," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 70(4), pages 477-501, December.
    • Handle: RePEc:spr:inrvec:v:70:y:2023:i:4:d:10.1007_s12232-023-00428-5
    DOI: 10.1007/s12232-023-00428-5
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    More about this item

    Keywords

    Corruption; FDI; Governance; MRA; PEESE;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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