Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297501 
Year of Publication: 
2018
Citation: 
[Journal:] Contemporary Economics [ISSN:] 2300-8814 [Volume:] 12 [Issue:] 3 [Year:] 2018 [Pages:] 269-284
Publisher: 
University of Finance and Management in Warsaw, Faculty of Management and Finance, Warsaw
Abstract: 
In 2009, Foreign Direct Investment (FDI) flows to developed countries experienced the largest decline among all regions and sub-regions. However, South, East and Southeast Asia showed the smallest decline among developing economies and remained the largest recipient of FDI inflows. Meanwhile, approximately 68% of the countries in Asia scored less than the tolerable level of corruption for investment (TLCI) in Africa (-0.27) over recent years. Moreover, corruption has been observed to be significant in virtually all Asian countries, but, despite this, the region remains the number one global investment destination. This study, therefore, estimates the TLCI in Asia and Europe to enable comparison across these regions. Secondary data from the World Development Indicators were used in this study. The frequency of the data is annual, and it is available from 1996 to 2013. The dynamic panel data estimation technique was deployed while controlling for other variables. The estimated TLCIs for Europe and Asia are 0.534 and -0.735, respectively, on the control of corruption scale, which ranges from approximately -2.5 (weak) to 2.5 (strong). Despite the lower TLCI in Asia, the region is still able to attract relatively more FDI inflow than Africa. This scenario may be attributed to the presence of sound policy factors that drive FDI inflows. Another reason may be due to the nature, scope, social role and the perception of corruption across these regions.
Subjects: 
corruption
tolerable level of corruption for investment
foreign direct investment
institutions
JEL: 
F18
F23
F20
F30
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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