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Is the book judged by its cover? Unveiling the impact of corruption on foreign direct investment in the PALOP economies

2026-02-21Artigo de investigação Acesso aberto
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datacite.subject.sdg10:Reduzir as Desigualdades
datacite.subject.sdg17:Parcerias para a Implementação dos Objetivos
dc.contributor.authorSá, Filipa
dc.contributor.authorCastro, Isabella
dc.contributor.authorResende, Mariana
dc.contributor.authorRamos, Matilde
dc.contributor.authorCerdeira, Jorge
dc.date.accessioned2026-03-11T14:19:16Z
dc.date.available2026-03-11T14:19:16Z
dc.date.issued2026-02-21
dc.description.abstractThis paper analyzes the impact of corruption on foreign direct investment (FDI) in the Portuguese-speaking African countries (PALOP) economies between 2006 and 2018. The focus lies on Angola, Cape Verde, Guinea-Bissau, and Mozambique since, according to Transparency International, they exhibit intermediate to low levels on the Corruption Perceptions Index. Despite sharing historical and cultural ties, as former Portuguese colonies, no research has focused on the impact of corruption on FDI in the PALOP economies, to the best of our knowledge. To accomplish this, we use an Instrumental Variables Fractional Probit Regression applied to data from the World Bank Enterprise Surveys, which gather information for 2180 firms. The results show that, on average, corruption does not significantly affect FDI in PALOP economies. Trade, credit, and firm size emerge as key FDI determinants, while investment levels and tax rates are not relevant. Corruption has negligible effects on FDI in manufacturing but boosts FDI in services. Interestingly, while corruption has no significant effect on FDI for small and medium firms, a positive, significant impact is revealed for large firms. Finally, corruption’s overall FDI impact is the same across PALOP countries, except in Angola, where it negatively influences FDI compared to Mozambique.eng
dc.identifier.citationSá, F., Castro, I., Resende, M., Ramos, M., & Cerdeira, J. (2026). Is the book judged by its cover? Unveiling the impact of corruption on foreign direct investment in the PALOP economies. Economies, 14(2), Article 66. https://doi.org/10.3390/economies14020066
dc.identifier.doi10.3390/economies14020066
dc.identifier.eid105031264159
dc.identifier.other3843cb86-011c-472a-b9b2-da1f5bae4384
dc.identifier.urihttp://hdl.handle.net/10400.14/57314
dc.identifier.wos001699993000001
dc.language.isoeng
dc.peerreviewedyes
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/
dc.subjectCorruption
dc.subjectFDI determinants
dc.subjectForeign direct investment
dc.subjectSub-Saharan Africa
dc.subjectPALOP
dc.titleIs the book judged by its cover? Unveiling the impact of corruption on foreign direct investment in the PALOP economieseng
dc.typeresearch article
dspace.entity.typePublication
oaire.citation.issue2
oaire.citation.titleEconomies
oaire.citation.volume14
oaire.versionhttp://purl.org/coar/version/c_970fb48d4fbd8a85

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