1887

OECD Working Papers on International Investment

Selected studies on international investment and investment policy prepared for use within the OECD. They address such issues as investment agreements, dispute settlement, fair and equitable treatment, most favored nation treatment, and corruption.

English

Foreign direct investment, corruption and the OECD Anti-Bribery Convention

This paper estimates a dynamic foreign direct investment (FDI) gravity model to explore the impact of corruption in general and the OECD Anti-Bribery Convention in particular. The evidence from previous studies in both domains is mixed, probably due to econometric inconsistencies and misuse of data. The more robust findings are that corruption has an insignificant or even positive effect on FDI in the general population. However, adherence to the OECD Anti-Bribery Convention has a clear negative impact on FDI—countries that adhere reduce investments in corrupt destinations.

English

Keywords: corrumption, institutions, law, foreign direct investment
JEL: 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
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