This research empirically analyses the effect of corruption on both inward and outward foreign direct investment in African economies. Data from the FDI markets database, CEPII gravity database and the World Bank database are combined resulting in a sample of about 225 countries. The random effect model is estimated to analyse how corruption plays a role in either deterring or attracting foreign direct investment. I argue that corruption has a negative effect on FDI and that the type of corruption is important in measuring the influence of corruption in Africa. The results show that a low level of corruption promotes outward FDI from African countries.

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C.T. Witte
hdl.handle.net/2105/38125
Business Economics
Erasmus School of Economics

A. Akinsola. (2017, May 23). The Effect of Corruption on Bilateral Foreign Direct Investment in Africa. Business Economics. Retrieved from http://hdl.handle.net/2105/38125