An Empirical Study Of Host Country's Corruption Impacts On Fdi

It is a symbol of the contemporary phenomenon of globalization that the late 1970's China reforms and opens, the eighties Latin America economy liberalization and the nineties accompanying economic reform of the Soviet Union's disintegration inside USSR. Developing countries rich in natural resources, cheap labor and vast market potential. Multinational corporations in developed countries therefore have seized the opportunities to invest in these countries these countries. Worldwide FDI increased dramatically. But in these countries, corruption has become an important factor affecting investment from multinational corporations, restricting the growth of FDI. Various news reports and commercial surveys show that corruption in China is very serious. However, in recent years China has been the largest developing countries to attract international investment. Former Indonesian President Suharto is known as "Mr. 10 percent" because all companies doing business in Indonesia usually need to pay a stroke clear and definite bribery to the president or his family members. However, Indonesia after the economic liberalization has gradually become a hot spot attracting FDI, especially Japanese capital more attractive. The current academic on host country's corruption impacts on FDI is not consistent final conclusion, and the empirical results obtained did not form a unified conclusion. Therefore, the in-depth study impact of host country corruption on FDI has important practical and theoretical significance.In order to study the above point of view, this empirical study from two aspects:one is that we study the impact of host country corruption on FDI from a global perspective; the other is that we study the impact of corruption on FDI in China's transition period. From the empirical results, we can draw the following conclusions. Firstly, the impact of corruption on FDI is different in different regions. Secondly the impact of corruption on FDI is different in different levels of development. Thirdly, the host country level of corruption in the short-term and long-term impact of FDI is also different. Finally, it is negative relationship between China's FDI in transitional period and corruption, that is deepening as the level of corruption, foreign direct investment will decrease, and this hindered is deepening year by year, and the statistics are also becoming increasingly significant. In addition, this article will divide the impact of host country corruption on FDI into four kinds of situations. In the first three situations, host country corruption hinders FDI, which shows that in most cases, corruption hinders FDI. In the latter situation, the host country corruption stimulates FDI. To some extent, this also proves the "effective corruption theory" existences.