Purpose – The purpose of this paper is to examine the relationship between economic growth, foreign direct investment (FDI) and corruption. Design/methodology/approach – Data for 42 developing countries and 28 developed countries is analyzed using panel dynamic ordinary least squares. Findings – FDI has a significant influence on economic growth in both the short run and the long run for developing and developed countries. In the cases of the developing economies, lower levels of corruption enhance the impact that FDI has on economic growth. Originality/value – The study links corruption to the impact of FDI on economic growth.
Journal of Economic Studies – Emerald Publishing
Published: Oct 26, 2012
Keywords: Panel co‐integration; Foreign direct investment; Corruption; Economic growth