Corruption and FDI Inflows: Evidence from a Small Developing Economy

Hamad A Kasasbeh (), Metri Mdanat and Raed Khasawneh ()

Asian Economic and Financial Review, 2018, vol. 8, issue 8, 1075-1085

Abstract: This study proposes an analytical framework for examining factors affecting foreign direct investment (FDI) inflows into developing economies, taking Jordan as an example. It uses multivariate VAR analysis to address the relationships of FDI with institutional factors, economic factors, population and financial factors. It thus demonstrates the existence of a significant negative effect of corruption on FDI inflows. However, this effect is substantially alleviated by improving the quality of institutions and good governance in the country. Based on the analysis, the study proposes a number of policies that could assist in attracting FDI. Supportive policies that tend to limit corruption are more likely to enforce the rule of law and good governance, which can contribute positively to attracting FDI.

Keywords: FDI inflows; Corruption; Multivariate VAR analysis (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://archive.aessweb.com/index.php/5002/article/view/1729/2585 (application/pdf)
https://archive.aessweb.com/index.php/5002/article/view/1729/3770 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:asi:aeafrj:v:8:y:2018:i:8:p:1075-1085:id:1729

Access Statistics for this article

More articles in Asian Economic and Financial Review from Asian Economic and Social Society
Bibliographic data for series maintained by Robert Allen ().