The Effects of Corruption on Foreign Investments in Developed and Developing Countries

This paper aimed to identify which elements related to the corruption impact the Foreign Direct Investment (FDI) regarding developed and developing countries. In order to achieve this purpose, the member countries of the Economic Commission for Latin America and the Caribbean (ECLAC) and the Organisation for Economic Co‐operation and Development (OECD) were analysed. It was a quanƟtaƟve and descripƟve survey, with a sample of 78 countries and secondary data from 2012 to 2017. The results were esƟmated by LogisƟc Regression and Multiple Linear Regression, with Random Effects (RA), chosen by the Breusch‐Pagan (1980) and Hausman (1978) tests. It was suggested that the corrupƟon does not impact the inflow of FDI; however, being a developed country, with positive Gross Domestic Product (GDP) growth rates, and institutional quality, have positive impacts on the inflow of the FDI. Moreover, it showed that it is possible to accept, with 95% confidence, the following statement, the more developed a country is, the smaller its Capital inflow of FDI.