Economic growth, foreign direct investment and corruption in developed and developing countries

Abstract

Purpose

The purpose of this paper is to examine the relationship between economic growth, foreign direct investment (FDI) and corruption.

Design/methodology/approach

Data for 42 developing countries and 28 developed countries is analyzed using panel dynamic ordinary least squares.

Findings

FDI has a significant influence on economic growth in both the short run and the long run for developing and developed countries. In the cases of the developing economies, lower levels of corruption enhance the impact that FDI has on economic growth.

Originality/value

The study links corruption to the impact of FDI on economic growth.

Citation

Freckleton, M., Wright, A. and Craigwell, R. (2012), "Economic growth, foreign direct investment and corruption in developed and developing countries", Journal of Economic Studies, Vol. 39 No. 6, pp. 639-652. https://doi.org/10.1108/01443581211274593