Corruption and its impact on foreign direct investment
Article Sidebar
Main Article Content
Abstract
Some studies show the negative impact of corruption on foreign direct investment (FDI) inflows. The high level of corruption can cause a direct reduction of FDI because of the bad reputation of the country abroad. Recent studies, however, also point to a possible reverse trend where countries with higher corruption are for some investors very attractive. This paper focuses on verification of the existence of relationship between the level of corruption and FDI and the impact of corruption on FDI in selected group of countries in period 1998–2015. The use of correlation analysis reveals a significant relationship between FDI and corruption. Regression analysis reveals the negative impact of corruption on FDI, particularly in countries with high levels of corruption. This analysis confirms the dependence of FDI on the level of corruption in the country especially in countries with a high level of corruption. Fighting corruption could be considered as a tool supporting investment inflows in these countries.
Keywords: Corruption, foreign direct investment (FDI), Corruption perception index (CPI), correlation analysis, regression analysis.
Downloads
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).