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Do MNCs spur financial markets in corrupt host countries?

Listed author(s):
  • Mohsen Bahmani-Oskooee

    ()

  • Shady Kholdy

    ()

  • Ahmad Sohrabian

    ()

This study investigates how MNCs can sway the growth of financial markets in the developing countries with prevalent political corruption. Using annual data of panel of 22 developing countries and applying dynamic generalized method of moment (GMM) technique, we find foreign firms can spur financial markets in the developing countries through direct investment. Furthermore, our results indicate the stimulus effect of foreign investment on financial development is stronger in the more corrupt countries. Copyright Springer Science+Business Media, LLC 2013

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File URL: http://hdl.handle.net/10.1007/s12197-011-9199-2
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Article provided by Springer & Academy of Economics and Finance in its journal Journal of Economics and Finance.

Volume (Year): 37 (2013)
Issue (Month): 2 (April)
Pages: 308-317

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Handle: RePEc:spr:jecfin:v:37:y:2013:i:2:p:308-317
DOI: 10.1007/s12197-011-9199-2
Contact details of provider: Web page: http://www.springer.com

Web page: http://economics-finance.org/

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  9. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 717-737.
  10. Pol Antràs & Mihir A. Desai & C. Fritz Foley, 2009. "Multinational Firms, FDI Flows, and Imperfect Capital Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 124(3), pages 1171-1219.
  11. King, Robert G. & Levine, Ross, 1993. "Finance, entrepreneurship and growth: Theory and evidence," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 513-542, December.
  12. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
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  22. repec:hrv:faseco:30747160 is not listed on IDEAS
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