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Does anti-bribery enforcement deter foreign investment?

Author

Listed:
  • Brad Graham
  • Caleb Stroup

Abstract

This article presents the first empirical evidence that bilateral fixed capital flows fall in response to anti-bribery enforcement actions. We hand-collect data on individual enforcement actions initiated by the US Department of Justice (DOJ) and show that anti-bribery enforcement in a country is followed by a 40% reduction in foreign fixed capital investments made by US companies in that country.

Suggested Citation

  • Brad Graham & Caleb Stroup, 2016. "Does anti-bribery enforcement deter foreign investment?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(1), pages 63-67, January.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:1:p:63-67
    DOI: 10.1080/13504851.2015.1049333
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    References listed on IDEAS

    as
    1. Caleb Stroup, 2017. "International Deal Experience And Cross-Border Acquisitions," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 73-97, January.
    2. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
    3. Alvaro Cuervo-Cazurra, 2008. "The effectiveness of laws against bribery abroad," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 634-651, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Kuvvet, Emre, 2021. "Anti-corruption courts and foreign direct investments," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 573-582.
    2. Brada, Josef C. & Drabek, Zdenek & Mendez, Jose A. & Perez, M. Fabricio, 2019. "National levels of corruption and foreign direct investment," Journal of Comparative Economics, Elsevier, vol. 47(1), pages 31-49.

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    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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