TY - JOUR
T1 - The impacts of corruption and environmental degradation on foreign direct investment
T2 - new evidence from the ASEAN+3 countries
AU - Shaari, Mohd Shahidan
AU - Esquivias, Miguel Angel
AU - Ridzuan, Abdul Rahim
AU - Fadzilah Zainal, Nor
AU - Sugiharti, Lilik
N1 - Publisher Copyright:
© 2022 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license.
PY - 2022
Y1 - 2022
N2 - Foreign direct investment (FDI) plays a vital role in boosting economic growth and providing more job opportunities. Hence, it is imperative to investigate the factors that can spur FDI inflows in the Southeast Asia region (ASEAN) and its three largest trading partners: China, Japan, and South Korea (ASEAN+3). Besides, whether corruption can boost or decrease FDI inflows, and whether larger environmental degradation triggers FDI inflows have been sparsely explored by previous studies. The panel Autoregressive Distributed Lag (ARDL) approach is employed to analyze the period from 1995 to 2020. The results show evidence of the grabbing hand hypothesis in ASEAN+3 as decreasing corruption can positively impact FDI inflows in the long run. However, the results support that increasing environmental degradation has spurred FDI in the region, suggesting reformulating investment promotion policies towards more environmentally friendly ones. These findings are important for policymakers to formulate the right policies for boosting FDI. Punishment for those who act in a corrupt manner may act as a deterrent to would-be offenders. Using more renewable energy could help to reduce environmental degradation and boost FDI simultaneously.
AB - Foreign direct investment (FDI) plays a vital role in boosting economic growth and providing more job opportunities. Hence, it is imperative to investigate the factors that can spur FDI inflows in the Southeast Asia region (ASEAN) and its three largest trading partners: China, Japan, and South Korea (ASEAN+3). Besides, whether corruption can boost or decrease FDI inflows, and whether larger environmental degradation triggers FDI inflows have been sparsely explored by previous studies. The panel Autoregressive Distributed Lag (ARDL) approach is employed to analyze the period from 1995 to 2020. The results show evidence of the grabbing hand hypothesis in ASEAN+3 as decreasing corruption can positively impact FDI inflows in the long run. However, the results support that increasing environmental degradation has spurred FDI in the region, suggesting reformulating investment promotion policies towards more environmentally friendly ones. These findings are important for policymakers to formulate the right policies for boosting FDI. Punishment for those who act in a corrupt manner may act as a deterrent to would-be offenders. Using more renewable energy could help to reduce environmental degradation and boost FDI simultaneously.
KW - FDI
KW - clean energy
KW - corruption
KW - energy consumption
KW - environmental degradation
KW - infrastructure investment
KW - market size
KW - trade openness
UR - http://www.scopus.com/inward/record.url?scp=85139249075&partnerID=8YFLogxK
U2 - 10.1080/23322039.2022.2124734
DO - 10.1080/23322039.2022.2124734
M3 - Article
AN - SCOPUS:85139249075
SN - 2332-2039
VL - 10
JO - Cogent Economics and Finance
JF - Cogent Economics and Finance
IS - 1
M1 - 2124734
ER -