Abstract
<p class="zhengwen"><span class="hps"><span lang="EN-US">This paper evaluates the</span></span><span class="hps"><span lang="EN-US">impact</span></span><span class="hps"><span lang="EN-US">of corruption on</span></span><span class="hps"><span lang="EN-US">economic sphere</span></span><span lang="EN-GB">, with special </span><span class="hps"><span lang="EN-US">emphasis on</span></span><span class="hps"><span lang="EN-US">inward foreign direct investment</span></span><span class="hps"><span lang="EN-US">(FDI</span></span><span lang="EN-GB">), as </span><span class="hps"><span lang="EN-US">investment is one</span></span><span class="hps"><span lang="EN-US">of the main factors</span></span><span class="hps"><span lang="EN-US">of economic performance</span></span><span lang="EN-GB">. </span><span class="hps"><span lang="EN-US">The impact of</span></span><span class="hps"><span lang="EN-US">corruption</span></span><span class="hps"><span lang="EN-US">on</span></span><span class="hps"><span lang="EN-US">FDI inflows</span></span><span class="hps"><span lang="EN-US">is</span></span><span class="hps"><span lang="EN-US">studied</span></span><span class="hps"><span lang="EN-US">globally</span></span><span lang="EN-GB">.</span><span class="hps"><span lang="EN-US">Based on the research</span></span><span class="hps"><span lang="EN-US">of contemporary literature</span></span><span lang="EN-GB">, it was found </span><span class="hps"><span lang="EN-US">that the</span></span><span class="hps"><span lang="EN-US">level of corruption</span></span><span class="hps"><span lang="EN-US">has</span></span><span class="hps"><span lang="EN-US">not clear negative</span></span><span class="hps"><span lang="EN-US">impact on</span></span><span class="hps"><span lang="EN-US">FDI</span></span><span lang="EN-GB">, </span><span class="hps"><span lang="EN-US">what is leading</span></span><span class="hps"><span lang="EN-US">to the formulation</span></span><span class="hps"><span lang="EN-US">of the research</span></span><span class="hps"><span lang="EN-US">objectives of this work</span></span><span lang="EN-GB">.</span><span class="hps"><span lang="EN-US">The results confirm</span></span><span class="hps"><span lang="EN-US">the</span></span><span class="hps"><span lang="EN-US">88 countries</span></span><span class="hps"><span lang="EN-US">for the years</span></span><span class="hps"><span lang="EN-US">2000, 2005</span></span><span class="hps"><span lang="EN-US">and 2011</span></span><span lang="EN-GB">, </span><span class="hps"><span lang="EN-US">the existence of a</span></span><span class="hps"><span lang="EN-US">negative relationship between</span></span><span class="hps"><span lang="EN-US">the level of corruption</span></span><span class="hps"><span lang="EN-US">and</span></span><span class="hps"><span lang="EN-US">FDI inflows</span></span><span lang="EN-GB">, this is a </span><span class="hps"><span lang="EN-US">statistically</span></span><span class="hps"><span lang="EN-US">significant relationship</span></span><span class="hps"><span lang="EN-US">and it is</span></span><span class="hps"><span lang="EN-US">this relationship further</span></span><span class="hps"><span lang="EN-US">quantified</span></span><span class="hps"><span lang="EN-US">within the</span></span><span class="hps"><span lang="EN-US">regression model.</span></span><span class="hps"><span lang="EN-US">In conclusion</span></span><span lang="EN-GB">, it is proposed </span><span class="hps"><span lang="EN-US">to include additional</span></span><span class="hps"><span lang="EN-US">explanatory</span></span><span class="hps"><span lang="EN-US">variables</span></span><span class="hps"><span lang="EN-US">in addition to</span></span><span class="hps"><span lang="EN-US">the degree of corruption</span></span><span class="hps"><span lang="EN-US">to understanding the causes</span></span><span class="hps"><span lang="EN-US">FDI inflows.</span></span></p>
Highlights
Corruption has a negative impact on the state of the public budget, causes economic decline in the state, disrupts political stability
In case of only two variables, a simple regression model may be appropriate where the dependent variable is defined the level of foreign direct investment (FDI) and the independent variable is the level of corruption as represented by Corruption Perception Index (CPI)
This is not surprising, because FDI is influenced by many other factors such as investment incentives introduced by governments, along with, for example, the cost of labor and skilled workforce and other variables
Summary
Corruption has a negative impact on the state of the public budget, causes economic decline in the state, disrupts political stability. There is strong empirical support for the negative impact of corruption on the ratio of investment to GDP and GDP growth, productivity, government services and healthcare, the structure of government spending and tax revenues (Lambsdorff, 2004). We can expect that corruption leads to reduced profitability and investment. Corruption in such a way can be considered as unpleasant obstacle for investors, which will play a role in their decision on the issue of FDI. There are studies that support and negate the hypothesis of a negative relationship between corruption and FDI (Al-Sadigo, 2009). This issue is discussed in this paper
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
