Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81195
Authors: 
Hakkala, Katariina
Norbäck, Pehr-Johan
Svaleryd, Helena
Year of Publication: 
2007
Series/Report no.: 
IUI Working Paper 641
Abstract: 
We examine the effect of corruption on foreign direct investments. Our model shows that corruption may have different effects on investments aimed at selling to a local market, in comparison to investments aimed at selling from the corrupt market. Using Swedish firm-level data, we find that affiliate local sales decrease with corruption, while affiliate exports increase. Finally, corruption has a negative effect on the probability that a foreign firm will invest in a country. These results are consistent with theory when bribing reduces production costs and local firms have an advantage in bribing vis à vis foreign firms.
Subjects: 
FDI
Corruption
Multinational Firm
JEL: 
D73
F21
F23
Document Type: 
Working Paper

Files in This Item:
File
Size
1.63 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.