The Moderating Effect of Home Country Corruption on the Host Country’s Ability to Attract FDI
Prior research has identified a negative impact of corruption on countries’ ability to attract Foreign Direct Investment (FDI) but has been scant in assessing the investors’ home country effects. We extend prior research by distinguishing the pervasiveness and arbitrariness of host country corruptio...
Saved in:
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
FUCAPE Business School
2016-01-01
|
| Series: | BBR: Brazilian Business Review |
| Subjects: | |
| Online Access: | http://www.redalyc.org/articulo.oa?id=123046404005 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1825207383940399104 |
|---|---|
| author | Manuel Portugal Ferreira Helder Costa Carreira Dan Li Fernando Ribeiro Serra |
| author_facet | Manuel Portugal Ferreira Helder Costa Carreira Dan Li Fernando Ribeiro Serra |
| author_sort | Manuel Portugal Ferreira |
| collection | DOAJ |
| description | Prior research has identified a negative impact of corruption on countries’ ability to attract Foreign Direct Investment (FDI) but has been scant in assessing the investors’ home country effects. We extend prior research by distinguishing the pervasiveness and arbitrariness of host country corruption and their effects on FDI inflows. We also test whether the investors’ home country corruption affects FDI decisions. Results show that host country pervasive corruption negatively drives FDI inflows but not the arbitrariness component. While the investors’ home country corruption negatively impacts the overall FDI outflows, investors from countries with high levels of corruption do not seem to be deterred by a high level of pervasive corruption in the host country. These results suggest that there may exist some form of corruption-dealing capability whereby firms from countries with high corruption are less sensitive to host country corruption and in fact they are able to leverage their capability and invest more in corrupt hosts. |
| format | Article |
| id | doaj-art-eee6e0718d1f432c880e661ab92b4020 |
| institution | Kabale University |
| issn | 1807-734X |
| language | English |
| publishDate | 2016-01-01 |
| publisher | FUCAPE Business School |
| record_format | Article |
| series | BBR: Brazilian Business Review |
| spelling | doaj-art-eee6e0718d1f432c880e661ab92b40202025-02-06T23:39:31ZengFUCAPE Business SchoolBBR: Brazilian Business Review1807-734X2016-01-0113494117The Moderating Effect of Home Country Corruption on the Host Country’s Ability to Attract FDIManuel Portugal FerreiraHelder Costa CarreiraDan LiFernando Ribeiro SerraPrior research has identified a negative impact of corruption on countries’ ability to attract Foreign Direct Investment (FDI) but has been scant in assessing the investors’ home country effects. We extend prior research by distinguishing the pervasiveness and arbitrariness of host country corruption and their effects on FDI inflows. We also test whether the investors’ home country corruption affects FDI decisions. Results show that host country pervasive corruption negatively drives FDI inflows but not the arbitrariness component. While the investors’ home country corruption negatively impacts the overall FDI outflows, investors from countries with high levels of corruption do not seem to be deterred by a high level of pervasive corruption in the host country. These results suggest that there may exist some form of corruption-dealing capability whereby firms from countries with high corruption are less sensitive to host country corruption and in fact they are able to leverage their capability and invest more in corrupt hosts.http://www.redalyc.org/articulo.oa?id=123046404005corruption effectshome country corruptioncorruptiondealing capability |
| spellingShingle | Manuel Portugal Ferreira Helder Costa Carreira Dan Li Fernando Ribeiro Serra The Moderating Effect of Home Country Corruption on the Host Country’s Ability to Attract FDI BBR: Brazilian Business Review corruption effects home country corruption corruption dealing capability |
| title | The Moderating Effect of Home Country Corruption on the Host Country’s Ability to Attract FDI |
| title_full | The Moderating Effect of Home Country Corruption on the Host Country’s Ability to Attract FDI |
| title_fullStr | The Moderating Effect of Home Country Corruption on the Host Country’s Ability to Attract FDI |
| title_full_unstemmed | The Moderating Effect of Home Country Corruption on the Host Country’s Ability to Attract FDI |
| title_short | The Moderating Effect of Home Country Corruption on the Host Country’s Ability to Attract FDI |
| title_sort | moderating effect of home country corruption on the host country s ability to attract fdi |
| topic | corruption effects home country corruption corruption dealing capability |
| url | http://www.redalyc.org/articulo.oa?id=123046404005 |
| work_keys_str_mv | AT manuelportugalferreira themoderatingeffectofhomecountrycorruptiononthehostcountrysabilitytoattractfdi AT heldercostacarreira themoderatingeffectofhomecountrycorruptiononthehostcountrysabilitytoattractfdi AT danli themoderatingeffectofhomecountrycorruptiononthehostcountrysabilitytoattractfdi AT fernandoribeiroserra themoderatingeffectofhomecountrycorruptiononthehostcountrysabilitytoattractfdi AT manuelportugalferreira moderatingeffectofhomecountrycorruptiononthehostcountrysabilitytoattractfdi AT heldercostacarreira moderatingeffectofhomecountrycorruptiononthehostcountrysabilitytoattractfdi AT danli moderatingeffectofhomecountrycorruptiononthehostcountrysabilitytoattractfdi AT fernandoribeiroserra moderatingeffectofhomecountrycorruptiononthehostcountrysabilitytoattractfdi |