Thesis (M.Sc.) - Cairo University - Faculty of Economics and Political Science - Department of Economics

Since 1990s, corruption phenomenon caught the attention of international organizations, civil societies, scientists, researchers and business corporations. In 2016, the World Bank has estimated that almost US$ 1 trillion is the amount of bribe payments yearly worldwide which reflects only one form of corruption practices and that globally the cost of corruption represents 5 percent of the world{u2019}s gross domestic product which reflects US$ 2.6 trillion. Since no single country is secured from corruption and due to the distortions and inefficiencies generated from corruption actions, it{u2019}s important to understand the definition of corruption, its types, forms, causes and impact. The study investigates the nature of corruption, as well as its impact on FDI inflows. It examines the impact of corruption on FDI inflows using an econometric model that utilizes panel data covering 46 developing countries over the period 2005-2017. Both economic factors including GDP growth, inflation rate, trade openness, and quality of institutions in terms of corruption levels and rule of law are considered in the analysis.The results revealed that the corruption level in the host country has an adverse effect on FDI inflows.Moreover, the results showed that GDP growth and urban population - as a proxy for market potential and size- are important factors in attracting FDI inflows into developing countries.The key implication of the study shows that combatting corruption could play an important role in attracting FDI inflows

Issued also as CD