This article examines the effect of corruption on the foreign direct investment (FDI) of BRICS economies, such as Brazil, Russia, India, China and South Africa. An annual data series of BRICS for 1995–2015 is used. The empirical model is estimated by using the system generalized method of moments (SGMM). The estimated outcomes suggest that corruption impacts FDI positively and significantly when these five nations are merged as a single unit. It is because corruption yields a restrictive economic effect. Moreover, the study also revealed that when we study the countries separately, corruption has a negative and significant effect on FDI in Brazil, China and India, whereas, the relationship becomes insignificant for Russia and South Africa. Results suggest that governments should enhance their policies to control corruption. Furthermore, to attract more FDI, the government of each country should look into the motivation behind their FDI inflows and tailor their polices accordingly.
Arrival of new information and dissemination of that information in asset prices is the determining force of asset returns. This paper studies the nexus between political and institutional corruption events with daily stock market returns by using Mega Corruption cases that were reported between January 2011 to February 2019. Therefore, to study how stock market returns react to these selected events, a mean adjusted model has been applied and a before and after, two and five day event window has been constructed. The results show that political and institutional corruption events have negative and significant impact on stock market returns. Hence, the paper concludes that investors and portfolio managers should be prudent towards their investment decisions during times of uncertainty.
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