Driffield, Nigel, Mickiewicz, Tomasz, Pal, Sarmistha and Temouri, Yama (2010). Bridging the gap? Corruption, knowledge and foreign ownership. Working Paper. CEDI.
Abstract
We argue that in addition to host corruption per se, as accounted for by the existing literature, an explanation of inter-country variation in FDI needs to account for the distance between the host and home corruption, which we call relative corruption. We use a large matched home-host firm-level panel data-set for 1998-2006 from CEE transition countries. Year-specific selectivity corrected estimates suggest that, ceteris paribus, higher relative ‘grand’ corruption lowers foreign ownership as the returns to investment tends to be lower in more corrupt environment. However, after controlling for the selectivity bias, knowledge-intensive parent firms are found to hold controlling ownership, as the difficulty of successful joint venture looms large in more corrupt environment. Results are robust to alternative specifications.
Divisions: | College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship College of Business and Social Sciences > Aston Business School > Aston India Foundation for Applied Research College of Business and Social Sciences > Aston Business School |
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Additional Information: | © 2010 The Authors |
Uncontrolled Keywords: | FDI,grand corruption,relative corruption,knowledge intensity,Eastern Europe |
Last Modified: | 05 Aug 2024 09:07 |
Date Deposited: | 26 Feb 2013 14:09 | PURE Output Type: | Working paper |
Published Date: | 2010-05 |
Authors: |
Driffield, Nigel
(![]() Mickiewicz, Tomasz ( ![]() Pal, Sarmistha Temouri, Yama ( ![]() |