The interactive effects of corruption and political instability on foreign direct investment: evidence from the Middle East region
by Mahmoud Abdelaziz Touny
International Journal of Trade and Global Markets (IJTGM), Vol. 9, No. 4, 2016

Abstract: This study attempts to empirically investigate the direct impact of corruption and political instability and the interactive effects of corruption and political instability along with other factors on FDI inflows to the Middle East countries using panel dynamic ordinary least square procedure. Findings of this study show that the effect of corruption on FDI inflows is mixed and depends on the level of political instability of the country. It confirms that corruption has a negative effect on FDI inflow in countries with high political instability but a positive impact in countries with relatively low levels of political instability. This implies that corruption is unfavourable for FDI inflows in countries with high levels of political instability and therefore drives out FDI inflows. The results imply some policy recommendations for policy makers in the Middle East countries especially those with high corruption and political instability levels to take a range of anti-corruption measures to get rid of corruption and enhance political stability.

Online publication date: Sat, 24-Dec-2016

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Trade and Global Markets (IJTGM):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email