Does Corruption Hinder Domestic Investment in the MENA Region: Evidence from a Panel-Country Analysis

Al-Tal Raad (), Al-Tarawneh Yaseen () and Mahasneh Shera ()
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Al-Tal Raad: Assistant Professor, Department of Economics, The University of Jordan, Amman, Jordan
Al-Tarawneh Yaseen: Associate Professor, Department of Economics, The University of Jordan, Amman, Jordan
Mahasneh Shera: Assistant to the Vice President for International Affairs, The University of Jordan, Amman, Jordan

Asian Journal of Law and Economics, 2023, vol. 14, issue 3, 225-243

Abstract: This study aims to investigate the impact of different facets of corruption on domestic investment (DI) in the Middle East and North Africa (MENA) economies. The main purpose of this empirical research to assess the influence of bribes, abuse of public office and nepotism on domestic investment in 14 MENA countries over the period 2005–2022. The results of 2SLS model indicate that corruption could affect negatively on domestic investments through two channels, namely: illegal payments (bribes) and the abuse of public office for private gain. In this case, the regulators and decision makers have to formulate new strategies that aimed particularly to fight these kinds of corruption to increase domestic investment.

Keywords: macroeconomic; corruption; domestic investment; political economy; 2SLS (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/ajle-2022-0121

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