CORRUPTION'S EFFECT ON FOREIGN DIRECT INVESTMENT – THE CASE OF MONTENEGRO

Economic Review

关键词: corruption;    risk;    investment;   

DOI  :  

来源: DOAJ

【 摘 要 】

All investments and asset classes have different levels of risks and expected returns. For example, low risk investments such as cashgenerally provide a lower return than high risk investments over the long term, but are unlikely to lead to a capital loss. High risk investments generally offer the potential of a higher returnover the long term, but there is a higher probability that high risk investments will be more volatile in the short term (leading tocapital loss if funds are withdrawn in the short term). This study introduces a new perspective on the role of corruption in investment growth and provides quantitative estimates of the impact of corruption on the investment inflows. Motivated by these issues, the main objective of this article is to empirically reexamine theeffects of corruption on foreign direct investment (FDI) inflows by incorporating a further link between corruption and investmentinflows as new understanding investment concepts. Using data from Transparency International report, World Bank and NationalBanking Statistical data, it is manifested in a cross sectional setting that corruption has a negative and significant impact on the foreign direct investment inflows. There are a number of risks to be considered such as investment market risk, credit risk orinterest rate risk, but the new model of eliminated unexpected risk involved managing corruption's effect on investments. Because ofthe need that assessing risk and potential investment returns should be in the context of goals and the time that we have to achieve ourobjectives, we have to immediately consider the linkage between corruption and investment inflows and to teach how to manage thisphenomenon like an old risk of a new model.

【 授权许可】

Unknown