Does Corruption Affect Foreign Direct Investment: Evidence From East Asian Countries

Abstract

Globalization has resulted in a significant increase in the FDI inflows. The impact of corruption on FDI inflow has been extensively studied in previous research. However, this topic has received scarce attention in Asians economies countries. Asian Economies is different from other Europe, Africa, North America and South America as rapid growth have seen in recent years. To fill the research gap, we collected data for seven South Asians countries. Based on the collected data, we first find out the effect of corruption on FDI. The results showed a positive and significant effect of corruption on FDI and supporting the helping hand theories of corruption which suggesting that South Asian countries should bring political stability and good governance, peace to attract more MNC, make strong law and its implementation to make corruption lessen.