Is corruption perception a critical deterrent for long-term international investment?

Abstract

The goal of the paper was to check for the presence of a critical deterrent effect of corruption on the inflows of capital from abroad (i.e. whether more corrupt countries received less investment than less corrupt ones) The first chapter covered the theoretical background and defined the concepts of corruption, aid and FDI for the purpose of this paper, as well as reviewed the existing research on the subject. The second explained how the current results’ unreplicability was unsatisfactory and described this paper’s approach to obtain more robust results. The third presents the results as well as their implications for economic actors (governments, aid agencies, companies) The result of this study was that overall, being perceived as corrupt did not result in lower received investments.