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Corresponding Author:
Teboho Jeremiah Mosikari, Department of Economics, North West University, South Africa

Coauthors:
T. Confidence Nthebe, Department of Economics, North-West University, South Africa
Joel H. Eita, School of Economics, College of Business and Economics, University of Johannesburg, South Africa

Does Corruption Hamper Inward FDI in South Africa from other African Countries? A Gravity Model Analysis

Volume 72 - Issue 4, November 2019
(pp. 513-532)
JEL classification: B40, C10, F02, F14
Keywords: Corruption, FDI Inflows, Panel Gravity Model

Abstract

The purpose of this paper is to investigate the relationship between corruption and FDI inflows from other African countries to South Africa. The study uses gravity model and employs panel data econometric technique such as pooled, fixed and random effects model. The results indicate that there is a significant negative relationship between South African corruption and FDI inflows from other African countries to South Africa. This implies that policy makers in South Africa should implement measures to curb corruption. This will help in attracting FDI inflows from other African countries and encourage the creation of job opportunities.

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Does Corruption Hamper Inward FDI in South Africa from other African Countries? A Gravity Model Analysis

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Institute for International Economics of the Genoa Chamber of Commerce

Institute for International Economics
of the Genoa Chamber of Commerce