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The Evil Act of Posing as an Angel: Can Financial Development Mitigate the Negative Effects of Corruption on Inward Foreign Direct Investment?

Syed Nazrul Islam

Bank Parikrama: A Journal of Banking and Finance2025https://doi.org/10.64204/bp1019-7044/50(1)/a20258article
ABDC C
Weight
0.50

What the paper says

Employing three distinct datasets of bilateral FDI positions and flows (UNCTAD, CDIS, and OECD) in a structural gravity approach, this paper examines the impact of financial development and corruption on inward FDI. Applying both OLS and PPML estimation techniques, this paper (with UNCTAD data) finds that the financial development of both host and home countries is a significant determinant of FDI. However, the estimates with CDIS and OECD data show that FDI in the host country is positively associated with home country financial development and, to some extent, negatively associated with that of the host country, which is mainly driven by the developed country groups. Corruption is a persistent problem for FDI; however, the interaction with a good financial sector works as an incentive for inward FDI. Control of corruption has a greater impact on FDI stocks in the developed country than in the developing country.

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https://doi.org/https://doi.org/10.64204/bp1019-7044/50(1)/a20258

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@article{syed2025,
  title        = {{The Evil Act of Posing as an Angel: Can Financial Development Mitigate the Negative Effects of Corruption on Inward Foreign Direct Investment?}},
  author       = {Syed Nazrul Islam},
  journal      = {Bank Parikrama: A Journal of Banking and Finance},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.64204/bp1019-7044/50(1)/a20258},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.