The effect of corruption on FDI: A parametric and non-parametric analysis

Barassi, Marco; Zhou, Ying

doi:10.1016/j.ejpoleco.2012.01.001

Cited by 138 publications

(107 citation statements)

References 33 publications

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“…Moreover, the long run coefficient of -0.02 indicates that a one unit increase in corruption will lead to a decrease of FDIs in BRIC countries by 1.74% in the long run. This negative relationship between corruption and FDI can be supported by many past literature like, Freckleton et al (2012), Barassi and Zhou (2012), Bayar (2011), Javorcik and Wei (2009), Cuervo-Cazurra (2008) and Hakkal et al (2008). Though, the findings of these studies were significant unlike the results of this research.…”

Section: Research Findingscontrasting

confidence: 57%

“…It was argued that corruption adversely affect Swedish multinational companies' choice of their FDI destinations indicating a significant negative relationship between corruption and FDI (Hakkal et al, 2008). In addition, this result has not changed using parametric and non-parametric analysis offering results that are in favour of the "helpinghand" role of corruption (Barassi and Zhou, 2012).…”

Section: Literature Reviewsupporting

confidence: 48%

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The effect of corruption, trade openness and political stability on foreign direct investment: Empirical evidence from BRIC countries

Abdella

2018

Int. j. adv. appl. sci.

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The decision of why a corporation would start or takeover a company in a foreign country rather than entering the foreign market through international trade has been a growing research topic for the last thirty years. This research aims to investigate the impact of corruption, trade openness, and political stability on foreign direct investments (FDI) in Brazil, Russia, India and China collectively. The study carried on the BRIC countries covered the period of 2002-2016, with total observations of 60 countriesyears. The dependent variable for this research is Foreign Direct Investments (FDIs) and the independent variables are Corruption, Trade Openness and Political Stability. The research has used Panel Fully Modified Ordinary Least Squares (FM-OLS) cointegrating regression model to analyse the relationships. The findings show that the independent variable (Corruption) places no significant effect on the Dependent Variable (FDIs) in the BRIC countries. While the other two Independent Variables (Trade Openness and Political Stability) place a significant effect on the Foreign Direct Investments in BRIC countries. Moreover, it was found out that the direction of the relationship for both independent variables was positive. In addition, specific Panel Unit Root tests and Cointegration test were applied to meet confirm the reliability of the FM-OLS for panel data collected. Thus, this research will help the policy makers and research community with the knowledge of new dimensions regarding the topic.

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Section: Research Findingscontrasting

confidence: 57%

Section: Literature Reviewsupporting

confidence: 48%

The effect of corruption, trade openness and political stability on foreign direct investment: Empirical evidence from BRIC countries

Abdella

2018

Int. j. adv. appl. sci.

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“…The works of Lui (1985), Wheeler and Mody (1992), Saha (2001), Egger and Winner (2005), Bjorvatn and Soreide (2005), Wu (2006), Tekin-Koru (2006) and Barassi and Zhou (2012) are examples of this line of study.…”

Section: (Ii) Corruption Acting As the "Helping Hand" In Fdimentioning

confidence: 99%

“…4 The cross derivatives of cost functions with respect to mobile skills and the level of corruption are as…”

Section: Assumptionsmentioning

confidence: 99%

Multinationals and Corruption: Business as Usual?

Tekin‐Koru

2017

Globalization

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This paper disentangles the e¤ects of corruption on entry mode decision by carrying out an empirical analysis with rich, …rm-level data on the activities of Swedish MNCs around the globe in manufacturing sectors from 1987 to 1998. A number of propositions emerge from a simple theoretical framework. The panorama of the results from the empirical part supports most of these propositions: (i). Corruption has a direct negative impact on green…eld investments and a weak positive impact on M&As. (ii). There are complex, asymmetric, secondary e¤ects of corruption on the mode of entry. (iii). International experience dampens the e¤ect of corruption on the mode of entry.(iv). The results are robust to di¤erences in measures of corruption. JEL Classi…cation: F23

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“…Poor institutional development and high risk deter foreign investment (Cheung & Qian, 2009 Barassi and Zhou (2012) found that corruption in a country acts like a "grabbing-hand" that increases the cost of doing business and thus discourages FDI inflows. On the other hand, Bjorvatn and Soreide (2005) and Shah (2001) argued that corruption can be a "helping-hand" and become an efficient "lubricant" for rigid regulation and red-tape and thus encourage FDI.…”

Section: The Determinants Of Fdi: Hypothesesmentioning

confidence: 99%

The US and Chinese Foreign Direct Investment in Africa

2013

CUBR

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This paper compares the patterns of the US and Chinese outward foreign direct investment (FDI) in Africa. The main objective of the paper is to examine if the motives for FDI for these two countries differ. This is done first with a descriptive analysis and then with empirical research. It reveals that Africa attracts only a small fraction of FDI from both the US and China. However, compared to the US, China's FDI outflow to Africa is rising rapidly. It

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The effect of corruption on FDI: A parametric and non-parametric analysis

Cited by 138 publications

References 33 publications

The effect of corruption, trade openness and political stability on foreign direct investment: Empirical evidence from BRIC countries

The effect of corruption, trade openness and political stability on foreign direct investment: Empirical evidence from BRIC countries

Multinationals and Corruption: Business as Usual?

The US and Chinese Foreign Direct Investment in Africa

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