1. Corruption, FDI, and Trade Freedom Relationship Between Turkey and Latin American Countries
- Author:
- Alexander Camacho Murcia and E. Murat Özgür
- Publication Date:
- 05-2022
- Content Type:
- Journal Article
- Journal:
- Bilgi
- Institution:
- Sakarya University (SAU)
- Abstract:
- Foreign Direct Investment (FDI) has been always associated with a high level of trade openness and freedom environment, and with a lower incidence of institutional corruption. Because it is assumed that a high level of international capital mobility makes foreign investors more cautious when there is a fluctuation in political stability and institutional transparency. Most American countries (except Canada and the USA) have been always related to a lack of transparency in their institutional and bureaucratic procedures, which conduct to important levels of corruption and in consequence, to other serious issues such as prominent level of violence, or even the inequality phenomena. This study investigates whether the variables of corruption indices, trade openness and inflation rates have positive or negative effects on FDI between Turkey and American countries. For analyzing this econometric model, it was gathered information from OECD, COMTRADE, TUIK, Heritage Foundation, UNCTAD, and the World Bank Database. The observed data correspond to a decade (2005-2014) and were only taken a sample of 14 American countries. The empirical results of the present study revealed that there is a positive correlation between the trade openness index and FDI; and, it was found a positive correlation between corruption index, inflation, and FDI. The increase in the corruption index causes a 41% increase in FDI inflow.
- Topic:
- International Relations, Corruption, Foreign Direct Investment, Economy, Free Trade, and Transparency
- Political Geography:
- Turkey and Latin America