TY  - JOUR
AB  - Purpose The purpose of this paper is to empirically investigate the impact of corruption on foreign direct investment (FDI) and its two major modes of entry: greenfield investment (greenfield) and cross-border mergers and acquisitions (M&As).Design/methodology/approach Data are collected from 131 countries. Modern econometric techniques, including the generalized method of moments (GMM) estimator, two-stage least square estimator and two-step system GMM estimator, are used to evaluate the impact of corruption on FDI activities.Findings The empirical results illustrate that corruption is a deterioration factor that significantly hinders FDI inflows. However, this finding turns out to be contradictory when the two major components of FDI – greenfield investment and cross-border M&As – are separately examined. Specifically, while corruption consistently discourages cross-border M&As over time, it appears to exert positive effect on greenfield investments.Originality/value This is among the first to empirically examine the impact of corruption on FDI and its modes of entry in a number of countries spanning different time windows. In this sense, this paper also captures the changing nature of societies and economic conditions overtime and, therefore, enable academic researchers, policy-makers and business practitioners to draw broad inferences from the empirical results.
VL  - 11
IS  - 2
SN  - 1757-6385
DO  - 10.1108/JFEP-05-2018-0075
UR  - https://doi.org/10.1108/JFEP-05-2018-0075
AU  - Luu Hiep Ngoc
AU  - Nguyen Ngoc Minh
AU  - Ho Hai Hong
AU  - Nam Vu Hoang
PY  - 2018
Y1  - 2018/01/01
TI  - The effect of corruption on FDI and its modes of entry
T2  - Journal of Financial Economic Policy
PB  - Emerald Publishing Limited
SP  - 232
EP  - 250
Y2  - 2024/05/07
ER  -