 Impact of Corruption on Foreign Direct Investment, Tax Revenues and Trade in Afghanistan: An Empirical Examination and Literature ReviewSomaya Karokhi and Mohammad Mirwais Rasa MPRA Paper from University Library of Munich, Germany Abstract: Using Transparency International’s Corruption Perceptions Index (CPI), this study establishes a statistically significant link between CPI and foreign direct investment (FDI) in Afghanistan. In addition to each country’s CPI, several location and economic characteristics are also postulated to influence FDI. For 2003- 2019 in Afghanistan, the paper then simulates the impact of an improvement in the CPI score on FDI. This simulation shows that a one-point improvement in CPI would generate on average additional FDI of 0.5% of GDP. The paper further simulates the effects of larger FDI on the generation of taxable income and tax revenues in Afghanistan using year’s specific rates of return on Afghanistan investment and the highest marginal corporate tax rate in Afghanistan. This simulation shows that a three-point improvement in CPI would more than double the corporate tax take on average with the biggest beneficiaries. Keywords: Trade; Corruption; FDI; Tax Revenues; Afghanistan (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:122672 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.