Authors: Hafiz M. Sohail
Addresses: School of Economics and Management, South China Normal University, Guangzhou 510631, China
Abstract: Foreign direct investment (FDI) is the overriding key in the advance and growth of any economy. In this paper, using unbalanced panel data and OLS regression, we first probe the effect of corruption on FDI in the host less corrupt country (LCC) and the host more corrupt country (MCC). Secondly, we investigate the impact of corruption difference (between home and host countries) on FDI in both categories (LCC, MCC). We test the model of big sample of countries that diverge in their level of corruption. To confirm the validity of this study, a multiplicity model of specifications and estimation strategies is investigated to endow with robustness. However, the consequence of corruption difference found negative and consider it as grabbing hand in full sample and in MCC. This study reveals that the overall effect of corruption is positive and found it as helping hand.
Keywords: corruption; corruption difference; MCC; more corrupt country; LCC; less corrupt country; FDI; foreign direct investment; international investment; panel data; cross boarder activities; regression analysis; factors movements.
International Journal of Economics and Business Research, 2020 Vol.20 No.4, pp.467 - 482
Received: 28 May 2020
Accepted: 01 Jul 2020
Published online: 21 Oct 2020 *