Corruption as an Obstacle or an Incentive to Fdi Flows: A Panel Data Analysis

Corruption is a ubiquitous societal problem that significantly influences corporate investment decisions in the international economic environment of today.Considerable attention is paid primarily to the economic effects of corruption.Its influence on foreign direct investment is one of the topics investigated.Some studies show that corruption deters foreign investors from making known investments in a country.However, some studies prove that this may not be the case at all and that corruption can, on the contrary, attract companies from certain countries to invest.This paper aims to explore in depth the multifaceted impact of corruption on foreign direct investment and dissect its role in corporate strategic choice, risk management, and sustainable development.Through the comprehensive use of literature research, case analysis, and theoretical discussion, the relevant multiple linear regression model is established.This paper adopts the corruption perception index published by Transparency International as the core independent variable and uses the panel data of 28 countries or regions from 1995 to 2022 to estimate the model and verify the relevant hypotheses.The results show that the effect of corruption on FDI is related to the level of corruption.When the corruption level is low, the breeding of corruption has a significant inhibitory effect on foreign investment, but when the corruption level is high, the increase in corruption perception does not show a significant linear relationship with foreign direct investment.By delving into the impact of corruption on corporate investment decisions, this paper is expected to provide business managers, policymakers, and academic researchers with practical insights and promote a deeper understanding of this complex topic.