ENVIRONMENTAL REGULATORY STRINGENCY, CORRUPTION, AND FDI: NEW EVIDENCE FROM A PANEL OF COUNTRIES

Authors

  • Sulhi Ridzuan UKM
  • Tamat Sarmidi UKM
  • Abu Hassan Shaari Mohd Nor UKM

Keywords:

Keywords, FDI, pollution haven, corruption, developing countries, developed countries.

Abstract

Previous literatures on both studies of pollution haven and FDI-corruption nexus have produced inconclusive results. This study uses Generalized Method of Moments (GMM) to address potential endogeneity of independent variables and country-specific effects issues when assessing the relationship between foreign direct investment (FDI), stringency of environmental regulations and corruption. FDI inflows are found to be discouraged by stricter environmental regulations and high level of corruption will induce FDI. Surprisingly, we find new evidence that both effects are changed after each of them exceeds threshold levels. Countries have to pass the threshold levels in order to gain positive impact of both stricter regulations and low level of corruption.

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Author Biographies

  • Sulhi Ridzuan, UKM
    School of Economics, Faculty of Economics and Management,Universiti Kebangsaan Malaysia
  • Tamat Sarmidi, UKM
    School of Economics, Faculty of Economics and Management,Universiti Kebangsaan Malaysia
  • Abu Hassan Shaari Mohd Nor, UKM
    School of Economics, Faculty of Economics and Management,Universiti Kebangsaan Malaysia

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Published

24-08-2014

Issue

Vol. 6 No. 2 (2014)

Section

Articles

License

Open access licenses

Open Access is by licensing the content with a Creative Commons (CC) license. 

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

 

How to Cite

Ridzuan, S., Sarmidi, T., & Mohd Nor, A. H. S. (2014). ENVIRONMENTAL REGULATORY STRINGENCY, CORRUPTION, AND FDI: NEW EVIDENCE FROM A PANEL OF COUNTRIES. Journal of Techno-Social, 6(2). https://publisher.uthm.edu.my/ojs/index.php/JTS/article/view/1114