J 2025

Corruption as an Obstacle or an Incentive to FDI Flows: A Panel Data Analysis

LINHARTOVÁ, Veronika

Basic 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:

URL

Impact factor

Impact factor: 1.000 in 2024

Marked to be transferred to RIV

Yes

Organization unit

Ambis University

DOI

https://doi.org/10.14254/1800-5845/2025.21-3.2

UT WoS

001538966300002

EID Scopus

2-s2.0-105008522541

Keywords in English

Corruption perceptions index;foreign direct investment;investment decision;panel data

Tags

RIV_2025

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.
Displayed: 19/6/2026 16:44