A neoschumpeterian review of the impact of corruption on competitiveness and foreign direct investment

Una revisión neoschumpeteriana del impacto de la corrupción sobre la competitividad y la inversión extranjera directa

Petra Hegemann () and Sergio A. Berumen ()
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Petra Hegemann: Frei Universität Berlin.
Sergio A. Berumen: Universidad Rey Juan Carlos.

Papeles de Europa, 2011, vol. 22, 39-60

Abstract: In countries where the government encourages “donations” and “gifts” from private companies, FDI firms are more likely than their domestic counterparts to engage in corrupt forms of political influence, known as State Captures. Different types of foreign investors engage in particular types of corruption, depending on what competitive advantage they will get out of it. FDI firms with local partners are more likely to engage in State Capture. Larger multinational firms with headquarters overseas rely much less on State Capture, yet are more likely to resort to political corruption and bribery, Kickbacks, in their dealing with foreign governments. Though quite often, foreign direct investors might claim that they are specifically targeted for bribes by local governments, it has been found that there is no evidence that FDI firms pay higher overall bribes than domestic firms, even though they are more likely to engage in specific forms of corruption.

Keywords: Corruption; Competitiveness and FDI.; Corrupción; Competitividad e inversión extranjera directa. (search for similar items in EconPapers)
JEL-codes: D70 D73 D74 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ucm:padeur:v:22:y:2011:p:39-60

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DOI: 10.5209/rev_PADE.2011.v22.2

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