@article{Espinosa Ramirez_2022, title={Foreign Direct Investment, Corruption, and Institutional Reforms}, volume={69}, url={https://panoeconomicus.org/index.php/jorunal/article/view/711}, DOI={10.2298/PAN181214011E}, abstractNote={<p>Corruption impacts the competitive conditions among firms and the flow of foreign investment. Institutional reforms made for fighting against corruption are sometimes useless. We develop a model in which a corrupted government tries to set an optimal institutional level taking into account the cost of this policy on foreign investment, the benefit of a corrupted domestic firm and the benefit of local citizens. A political contribution is made by a corrupted lobby group in order to benefit from a lower institutional level. Our results suggest that the optimal institutional level depends on the degree of efficiency of firms and the level of corruption of the host government. <br><br><strong>Key words:</strong> Corruption, Lobbying, Institutional reforms, Foreign direct investment. <br><br><strong>JEL:</strong> F21, F30, K42.</p>}, number={1}, journal={Panoeconomicus}, author={Espinosa Ramirez, Rafael Salvador}, year={2022}, month={Mar.}, pages={17–34} }