Is Corruption Good or Bad for FDI? Empirical Evidence from Asia, Africa and Latin America

Authors

  • Abdul Jalil Quaid-i-Azam University, School of Economics, Islamabad, Pakistan
  • Amina Qureshi Quaid-i-Azam University, School of Economics, Islamabad, Pakistan
  • Mete Feridun Eastern Mediterranean University, Faculty of Business and Economics, Mersin, Turkey

DOI:

https://doi.org/10.2298/PAN1603259J

Keywords:

FDI, Corruption, Panel data

Abstract

This article revisits the relationship between corruption and Foreign Direct Investment inflows in a panel of 42 countries from 1984 to 2012 using pooled mean group estimator in a dynamic heterogeneous panel setting using Westerlund and ARDL panel cointegration tests where the estimations are carried out by three different estimators: the pooled mean group (PMG), mean group (MG), and the dynamic fixed effect (DFE) estimators in order to examine both the long- and short-term effects of corruption on FDI inflows. The results suggest that corruption has a positive impact on FDI inflows in the case of Asia and Africa; and a negative impact in the case of Latin America.

Key words: FDI, Corruption, Panel data.
JEL: B28, F15.

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Published

2016-10-15

How to Cite

Jalil, A., Qureshi, A., & Feridun, M. (2016). Is Corruption Good or Bad for FDI? Empirical Evidence from Asia, Africa and Latin America. Panoeconomicus, 63(3), 259–271. https://doi.org/10.2298/PAN1603259J

Issue

Vol. 63 No. 3 (2016)

Section

Original scientific paper