Correction to: Corruption and foreign direct investment phases: The moderating role of institutions

Yi, Jingtao; Meng, Shuang; Macaulay, Craig D.; Peng, Mike W.

doi:10.1057/s42214-019-00026-9

Cited by 1 publication

(7 citation statements)

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“…The African countries are a perfect sample of study as they received bilateral aid from European‐OECD countries and are characterized by high corruption. The data for dependent (FDI), independent (corruption), moderating (foreign aid and democracy), and control variables are collected from multiple sources such as UNCTAD, ICRG, TI, http://ourworldindata.com, World Development Indicator, Heritage Foundation, Freedom House, CEPII, and polity‐iv (Cuervo‐Cazurra, 2006; Yi et al, 2019). Table 1 summarizes the variables, measures, and sources of data.…”

Section: Methodsmentioning

confidence: 99%

“…For example, Yi et al (2019) investigated the role of freedom of the press and investment freedom as national institutions in moderating the relationship between corruption and FDI.…”

Section: Corruption and Fdi: The Moderating Role Of Foreign Aid As An...mentioning

confidence: 99%

“…Researchers confirm that formal national institutions reduce government corruption and increase trade and FDI (Aisbett, 2009; Alesina & Weder, 2002; Badinger & Nindl, 2014; Cuervo‐Cazurra, 2006; Ear, 2007; Okada & Samreth, 2012; Wei, 2000). For example, Yi et al (2019) investigated the role of freedom of the press and investment freedom as national institutions in moderating the relationship between corruption and FDI.…”

Section: Hypotheses Development and Theorymentioning

confidence: 99%

“…Several researchers attempting to resolve the tension in the literature concerning the link between corruption and investment have investigated moderating factors and other governance‐related influences. However, few researchers analyzed the moderating role of freedom of press and freedom of investment as a national institution between corruption and FDI (Yi et al, 2019). Others have focused on regime type.…”

Section: Introductionmentioning

confidence: 99%

“…This study uses data from the Organization for Economic Cooperation and Development (OECD), a unique forum of 37 democratic and market‐based economies seeking to promote policy standards and sustainable economic development. According to the OECD's Foreign Bribery Report (2014), the group aims to reduce global corruption but will continue to trade with and invest in countries with poor governance (Bahoo et al, 2022; OECD, 1997; Yi et al, 2019). From the OECD's point of view, the objective of foreign aid is to improve governance by attaching strict conditions to it and attracting foreign investment (Bearce, 2013).…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Corruption, formal institutions, and foreign direct investment: The case of OECD countries in Africa

Bahoo

Alon

Floreani

et al. 2023

Thunderbird Intl Bus Rev

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PurposeCorruption has shown a mixed impact on foreign direct investment (FDI). This study proposed moderating the role of two—foreign aid (international institution) from the home country and democracy (national institution) in the host country—between corruption‐FDI nexus.MethodologyThe framework is analyzed using panel data analysis (2001–2018) of bilateral foreign aid and FDI from 18 European members of the Organization for Economic Cooperation and Development (OECD) to 34 African countries.FindingsThe presents several key findings. First, Africa's level of government corruption harms bilateral FDI from Europe. Second, the OECD's bilateral foreign aid moderates the negative effects of Africa's host‐country corruption on FDI. Third, the level of democracy in the host country also moderates the negative impact of corruption on FDI. Finally, foreign aid strongly moderates the negative effect of corruption on FDI in democratic countries compared to non‐democratic host countries.Research ImplicationsThis study provides the institutional analysis that bilateral foreign aid and democracy as formal institutions affect the European multinational enterprises's decision to invest in Africa.Practical ImplicationsIt presents the policy and managerial implications. First, European MNEs managers avoid investing in Africa, and governments must take strict actions to attract FDI. Second, foreign aid and democracy motivate MNEs to invest in Africa. Finally, the OECD policymaker could formulate rigorous and relevant conditions for foreign aid to Africa to reduce corruption.Originality/ValueThrough the lens of institutional theory and selectorate theory, the novel institutional role of foreign aid and democracy is proposed and tested between the nexus of corruption‐FDI.

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Section: Methodsmentioning

confidence: 99%

“…For example, Yi et al (2019) investigated the role of freedom of the press and investment freedom as national institutions in moderating the relationship between corruption and FDI.…”

Section: Corruption and Fdi: The Moderating Role Of Foreign Aid As An...mentioning

confidence: 99%