2025
Corruption as an Obstacle or an Incentive to FDI Flows: A Panel Data Analysis
LINHARTOVÁ, VeronikaBasic information
Original name
Corruption as an Obstacle or an Incentive to FDI Flows: A Panel Data Analysis
Authors
LINHARTOVÁ, Veronika
Edition
Montenegrin Journal of Economics, Podgorica, ELIT - Economic Laboratory for Transition Research, 2025, 1800-5845
Other information
Language
English
Type of outcome
Article in a journal
Field of Study
50204 Business and management
Country of publisher
Montenegro
Confidentiality degree
is not subject to a state or trade secret
References:
Impact factor
Impact factor: 1.000 in 2024
Marked to be transferred to RIV
Yes
Organization unit
Ambis University
UT WoS
EID Scopus
Keywords in English
Corruption perceptions index;foreign direct investment;investment decision;panel data
Tags
Tags
International impact, Reviewed
Changed: 3/2/2026 15:20, Ing. Kateřina Lendrová
Abstract
In the original language
Corruption is a ubiquitous societal problem that significantly influences cor porate investment decisions in the international economic environment of to day. Considerable attention is paid primarily to the economic effects of cor ruption. Its influence on foreign direct investment is one of the topics investi gated. Some studies show that corruption deters foreign investors from mak ing known investments in a country. However, some studies prove that this may not be the case at all and that corruption can, on the contrary, attract companies from certain countries to invest. This paper aims to explore in depth the multifaceted impact of corruption on foreign direct investment and dissect its role in corporate strategic choice, risk management, and sustain able development. Through the comprehensive use of literature research, case analysis, and theoretical discussion, the relevant multiple linear regres sion model is established. This paper adopts the corruption perception index published by Transparency International as the core independent variable and uses the panel data of 28 countries or regions from 1995 to 2022 to estimate the model and verify the relevant hypotheses. The results show that the effect of corruption on FDI is related to the level of corruption. When the corruption level is low, the breeding of corruption has a significant inhibitory effect on foreign investment, but when the corruption level is high, the in crease in corruption perception does not show a significant linear relation ship with foreign direct investment. By delving into the impact of corruption on corporate investment decisions, this paper is expected to provide business managers, policymakers, and academic researchers with practical insights and promote a deeper understanding of this complex topic.