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Corruption & Foreign Direct Investment: The Case of South Asia

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  • Shah, Mumtaz Hussain

Abstract

This paper empirically explores the influence of corruption, bureaucratic quality and government stability on inward FDI to four developing nations from South Asia, which are, Bangladesh, India, Pakistan and Sri Lanka. Owing to the long-term relationship with the host, absence of corruption and bureaucratic intervention are crucial location advantages of host countries, especially for those, which lack abundant natural resources, e-g SAARC economies, to attract foreign investors. For a thorough analysis, random effect panel method is exploited for aggregate FDI inflows in the host countries from 1985 to 2008. It is found that for foreign direct investors in SAARC nations: absence of corruption, honest public office holders, efficient bureaucracy and government stability count the most.

Suggested Citation

  • Shah, Mumtaz Hussain, 2018. "Corruption & Foreign Direct Investment: The Case of South Asia," MPRA Paper 107253, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:107253
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    References listed on IDEAS

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    Cited by:

    1. Shah, Mumtaz Hussain & Azam, Ayesha, 2018. "Financial Development and Investors Location Choice in The Arab World," MPRA Paper 107245, University Library of Munich, Germany.
    2. Shah, Mumtaz Hussain & Khan, Faisal, 2019. "Telecommunication Infrastructure Development and FDI into Asian Developing Nations," MPRA Paper 107255, University Library of Munich, Germany.

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    More about this item

    Keywords

    FDI; Corruption; Bureaucratic Quality; Panel Data; SAARC countries;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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