The impact of corruption on Foreign Direct Investment inflows

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School of Business | Bachelor's thesis
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Date

2024

Department

Mikkelin kampus

Major/Subject

Mcode

Degree programme

(Mikkeli) Bachelor’s Program in International Business

Language

en

Pages

24+1

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Abstract

This study explored the influence of corruption perception, GDP growth, inflation, and political stability on Foreign Direct Investment (FDI) inflows across 176 countries from 2012 to 2022. Utilizing panel data regression analysis, the research aimed to quantify the impact of these variables on FDI. The findings revealed a significant positive correlation between the Corruption Perceptions Index (CPI) and FDI, while GDP growth and inflation showed no significant impact. Contrary to expectations, a negative correlation was observed between political stability and FDI inflows, challenging traditional views on political risk and investment. The results highlight the complexity of factors influencing FDI and suggest the need for nuanced strategies in attracting foreign investments.

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Thesis advisor

Stepanov, Roman

Keywords

Foreign Direct Investment (FDI), Corruption Perceptions Index (CPI), GDP growth, inflation rate, political stability

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https://urn.fi/URN:NBN:fi:aalto-202405263613

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[kand] Kauppakorkeakoulu / BIZ