Institutional environment and firms' sources of financial capital in Central and Eastern Europe

O impacto de dimensões selecionadas do ambiente institucional dos países da África Subsaariana na sua capacidade de atrair investimento estrangeiro

“…Thus, firms entering a foreign country must be knowledgeable of the host country institutional conditions they will face (Brouthers, 2002;Ferreira & Li, 2011). Scott (1995 defined institutions as the regulatory, normative and cognitive structures that provide stability and meaning to social behavior.…”

“…Corruption in the existing institutional apparatus increases the hazards of operating in some countries (Shleifer & Vishny, 1993;Cuervo-Cazurra, 2007), and heightens the uncertainties and costs of having to pay to get things done (Kaufmann et al, 2003), thus decreasing FDI (Wei, 2000). In these instances, firms are likely to seek alternative informal channels to resolve their problems (Li & Ferreira, 2011) and, as noted by Dixon and Polyakov (1998) in the case of the widespread corruption in the Soviet political system, bribery has become a guarantee that agents (e.g., government officials) fulfill their official functions (Olson, 1995).…”

“…Corruption generates lower investor confidence that discourages future foreign investments (Mauro, 1995). According to Li and Ferreira (2011), additional payments to officials are additional transaction costs that encourage firms to rely more on informal relations that avoid involvement with government officials. Corruption is endemic throughout Africa and is one of the main reasons for MNCs not investing in Africa (Dahou & Khalil, 2009).…”

“…These host country characteristics may originate from economic factors, market size, purchasing power and income profile, but also from the legal, political, 1 Corresponding author: Email: manuel.portugal.ferreira@gmail.com geographic, infrastructure, culture, level of taxation, restrictions on trade and investment, among others (Asiedu, 2004(Asiedu, , 2006Kaufmann et al, 2003Kaufmann et al, , 2009Naude, Krugell & 2007;Berry et al, 2010). Especially relevant for attracting FDI seem the institutional features of the countries (Kostova & Roth, 2003;Ferreira & Li, 2011). In the case of less developed countries, with higher levels of corruption, where informal institutions dominate and an infrastructure, for instance, the financial markets, is still incipient or ineffective (Kostova & Roth, 2003;Li & Ferreira, 2011), the impact of the inefficiencies, ineffectiveness and institutional voids may be especially hazardous for firms and for attracting foreign investments.…”

“…Especially relevant for attracting FDI seem the institutional features of the countries (Kostova & Roth, 2003;Ferreira & Li, 2011). In the case of less developed countries, with higher levels of corruption, where informal institutions dominate and an infrastructure, for instance, the financial markets, is still incipient or ineffective (Kostova & Roth, 2003;Li & Ferreira, 2011), the impact of the inefficiencies, ineffectiveness and institutional voids may be especially hazardous for firms and for attracting foreign investments.…”