Munich Personal RePEc Archive

Corruption & Foreign Direct Investment: The Case of South Asia

Shah, Mumtaz Hussain (2018): Corruption & Foreign Direct Investment: The Case of South Asia. Published in: PUTAJ – Humanities and Social Sciences , Vol. 25, No. 1 (June 2018): pp. 1-16.

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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.

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