Impact of corruption on Foreign Direct Investment in a sample of developing countries during the period (2005 - 2020): A standard study utilizing panel data

Abstract

The research aims to study the impact of corruption on foreign direct investment for the period (2005-2020), using a dynamic panel for a sample that included (12) developing countries, where the method of estimating (PMG) was used to estimate the study model, which showed that the Corruption Perceptions Index significant and inverse relationship with foreign investment in the long term for the countries under study, which is consistent with most of the previous studies, where corruption is considered a tax of an impeding nature to investment and reduces the incentive to invest because investors in the corrupt environment have additional burdens when they carry out their investment activities, either in the long run In accordance with the error correction model, we noticed positive  significant effect of the corruption variable on foreign direct investment, due to the delayed response of the foreign investor to the spread of corruption in the host country .