A Review of the Impact of Control of Corruption on FDI Inflows in Asian Developing Economies
Abstract
The control of corruption plays a pivotal role in shaping the economic landscape of developing economies, particularly in attracting Foreign Direct Investment (FDI). This study examines the impact of corruption control on FDI inflows in Asian developing countries, focusing on the period from 1996 to 2023. Using panel data analysis and econometric modeling, the research explores the relationship between governance indicators, specifically the control of corruption, and FDI inflows. The findings reveal a significant positive correlation between effective corruption control and increased FDI inflows, highlighting that countries with stronger anti-corruption measures tend to attract higher levels of foreign investment. The study also identifies key mediating factors such as political stability, regulatory quality, and economic openness, which further enhance the attractiveness of these economies to foreign investors. Case studies of selected Asian developing economies, including India, Vietnam, and Indonesia, provide empirical evidence supporting the hypothesis that improved governance and reduced corruption foster a more conducive environment for FDI. The research underscores the importance of institutional reforms and transparent governance in promoting sustainable economic growth and integration into the global economy. Policymakers in developing Asian economies are urged to prioritize anti-corruption initiatives and strengthen institutional frameworks to capitalize on the potential benefits of increased FDI Inflows.
