Abstract
This study examines the impact of corruption on foreign direct investment (FDI). First, the level of corruption in the host country is analyzed. Second, the absolute difference in the corruption level between the host and home country is examined. The analysis provides support for the negative impacts of both. The results suggest that foreign investors generally avoid corruption because it is considered wrong and it can create operational inefficiencies.
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*Mohsin Habib is Assistant Professor of Management at the University of Massachusetts, Boston. His research interests include FDI and ethics in the context of multinationals.
**Leon Zurawicki is Professor of Marketing at the University of Massachusetts, Boston. His interests focus on competition among multinational corporations and locus of their FDI.
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Habib, M., Zurawicki, L. Corruption and Foreign Direct Investment. J Int Bus Stud 33, 291–307 (2002). https://doi.org/10.1057/palgrave.jibs.8491017
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DOI: https://doi.org/10.1057/palgrave.jibs.8491017