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Corruption and Private Domestic Investment: evidence from developing countries

Author

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  • Ali Al-Sadig

Abstract

While there is a large number of empirical studies on the effects of corruption on economic growth, studies on the relationship between corruption and Private Domestic Investment (PDI) are scared. Therefore, the main purpose of this study is to examine empirically the effects of corruption on the rate of PDI. We apply system Generalised Method of Moments (GMM) to cope with the potential simultaneity between PDI and corruption and we estimate the model based on panel data from 71 developing countries over the period 1984-2000. The empirical results show that corruption has a robust negative effect on the rate of private investment.

Suggested Citation

  • Ali Al-Sadig, 2010. "Corruption and Private Domestic Investment: evidence from developing countries," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 3(1), pages 47-60.
    • Handle: RePEc:ids:ijepee:v:3:y:2010:i:1:p:47-60
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    Cited by:

    1. Vivekananda Mukherjee & Paramita Mukherjee & Saheli Bose, 2022. "Extortion, competition among states and private investment in a federation: evidence from Indian manufacturing sector," Economic Change and Restructuring, Springer, vol. 55(2), pages 973-1004, May.
    2. Mungiu-Pippidi, Alina & Hartmann, Till, 2019. "Corruption and Development: A Reappraisal," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics.
    3. Mounir Belloumi & Atef Saad Alshehry, 2021. "The Causal Relationships Between Corruption, Investments and Economic Growth in GCC Countries," SAGE Open, , vol. 11(4), pages 21582440211, October.

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