Abstract
Previous studies have proposed that a compensatory model predicts the level of foreign direct investment (FDI) in a country; FDI levels are a result of ‘trade-offs’ between the positive effect of market attractiveness and the negative influence of corruption. In contrast, we hypothesize and find that the compensatory relationship only holds for market-seeking investment; for resource-seeking FDI the model appears to be noncompensatory. Greater market attractiveness mitigates the negative impact of corruption on market-seeking investment, but the ability of market attractiveness to mitigate the negative impact of corruption on resource-seeking FDI quickly disappears as corruption levels increase. Implications and future research directions are discussed.
| Original language | English |
|---|---|
| Pages (from-to) | 673-680 |
| Journal | Strategic Management Journal |
| Volume | 29 |
| Issue number | 6 |
| DOIs | |
| Publication status | Published - 22 Feb 2008 |
| Externally published | Yes |
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 16 Peace, Justice and Strong Institutions
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