The effect of corruption on American investment abroad in the 21st century.

摘要

The world is getting smaller. Globalization is creating an increased level of interconnectedness, raising the importance of understanding the relationship of those connections. An important facet of globalization is foreign direct investment (FDI). This study looks at the effects of corruption in a host nation on the FDI decisions of United States organizations, and compares the decisions of United States organizations against the decisions of the world as a whole. Using panel data from 2000 to 2010 and performing fixed effects regressions, I find that corruption negatively affects the FDI decisions of United States firms at a significant level in the 21st century. However, I find no difference between the effects of corruption on the FDI decisions of United States firms versus the FDI decisions of firms across the globe.