• OpenAccess
  • Does Corruption in a Country Affect the Foreign Direct Investment? A Study of Rising Economic Super Powers China and India  [MASS 2015]
  • DOI: 10.4236/jss.2015.37017   PP.99 - 104
  • Author(s)
  • Siva Prasad Ravi
  • Many researchers have studied the effect of corruption on Foreign Direct Investment (FDI) and majority of them have come to the conclusion that higher levels corruption in a country deter FDI. This paper is a case-based comparative study of the effect of corruption on FDI in China and India. Corruption in India has negatively affected FDI, whereas that is not true in China. This study finds that while corruption does affect FDI inflows into a country, the effect also depends on nature of corruption and not only on size of corruption.

  • Corruption, Direct Investment (FDI), Comparative Study, China, India
  • References
  • [1]
    UNCTAD (2014) World Investment Report.
    International Monitory Fund (2014)
    IMF (2004)
    Anitha, R. (2012) Foreign Direct Investment and Economic Growth in India. International Journal of Marketing, Financial Services & Management Research, 1.
    Alemu, A.M. (2012) The Effect of Corruption on FDI Inflow: Empirical Evidence from Panel Data of East Asian Countries. Seoul Journal of Economics, 25, 387-412.
    World Bank (2014) GDP Growth (An-nual %) Data.
    The World Bank (2010) Foreign Direct Investment—The China Story.
    Klitgaard, R. (1995) International Cooperation against Corruption, Finance and Development. 3-6 March.
    Pathak and Prasad (2006)
    Lee, S.H. and Oh, K. (2007) Corruption in Asia: Pervasiveness and Arbitrariness. Asia Pacific Journal of Management.
    Business Today (2014)
    Financial Times, Confi-dence in India’s State Lenders Shaken by Bribery Scandal. 5 August 2014.
    Huang, Y. (2015) Arresting Corruption in China—Why China’s Form of Corruption Is So Unique? The Diplomat.
    Magnier (2013)
    The Economist (2014) Corporate Corruption China. A Bitter Pill for GlaxoSmithKline.
    Voroacos, D. (2013) China’s Bribery Culture Poses Risks for Multinationals. 20 November 2013.
    The China Post (2011) India FDI Slumps 78 Percent in June over Corruption, Bureaucracy, Reform.
    Ketakr, K.W., Murtuza, A. and Ketkar, S.L. (2005) Impact of Corruption on Foreign Direct Investment and Tax Revenues. Journal of Public Budgeting, Accounting & Financial Management, 17, 313.
    Wei (1997)
    Qian, X., Sandoval-Hernandez, J. and Garrett, J.Z. (2012) Corruption Distance and Foreign Direct Investment.

Engineering Information Institute is the member of/source content provider to