Corruption and cross-border investment in emerging markets: Firm-level evidence

Beata Javorcik and Shang-Jin Wei

Journal of International Money and Finance, 2009, vol. 28, issue 4, 605-624

Abstract: This paper studies the joint impact of corruption on the entry mode and volume of inward foreign direct investment (FDI) using a unique firm-level data set. We find that corruption not only reduces inward FDI, but also shifts the ownership structure towards joint ventures. The latter finding supports the view that corruption increases the value of using a local partner to cut through the bureaucratic maze. However, R&D intensive firms are found to favor sole ownership.

Keywords: Corruption; Developing; countries; Foreign; direct; investment; Multinational; firms; Joint; ventures (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (165)

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Working Paper: Corruption and Cross-Border Investment in Emerging Markets: Firm-Level Evidence (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:28:y:2009:i:4:p:605-624

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