Outward FDI from the USA and host country financial transparency
Bebonchu Atems () and
John K Mullen
The Journal of International Trade & Economic Development, 2016, vol. 25, issue 8, 1122-1143
Extant research has focused on the role of host country corruption as either an attractant or deterrent to foreign investment. These studies generally contend that corruption acts more like a ‘grabbing hand’ than as a ‘helping hand’. However, it is plausible that a significant component of foreign investment may be attracted to locales that offer opaque financial environments. Specifically, we hypothesize that money laundering opportunities may encourage illicit capital flows into certain jurisdictions. Using the USA as the ‘source’ country, we investigate the effect of corruption and money laundering opportunities on Foreign Direct Investment (FDI) flows. The empirical findings indicate that corruption deters foreign investment, while money laundering opportunities attract it. We also show that the effect of money laundering and corruption vary based on the host country's level of development. Our findings bolster the contention that FDI into certain host countries is motivated by a facilitation of illicit capital flows.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:taf:jitecd:v:25:y:2016:i:8:p:1122-1143
Ordering information: This journal article can be ordered from
Access Statistics for this article
The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk
More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().