Nexus between corruption, market capitalization, exports, FDI, and country’s wealth: A pre-global financial crisis study
-
Author(s)Mamdouh Abdulaziz Saleh Al-FaryanLink to ORCID Index: https://orcid.org/0000-0003-1665-807X
-
DOIhttp://dx.doi.org/10.21511/ppm.20(4).2022.17
-
Article InfoVolume 20 2022, Issue #4, pp. 224-237
- Cited by
- 402 Views
-
99 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The study investigates the impact of corruption, market capitalization, exports, and foreign direct investment on the wealth of 178 countries worldwide. Thus, the paper uses univariate and multivariate regressions to observe the nexus among exports, foreign direct investment, market capitalization, corruption, and wealth of nations. The findings indicate that corruption poses a significant hindrance to prosperity and development, as evaluated with respect to the Transparency International Corruption Perceptions Index. Additionally, the results showed that the world’s poorest nations are becoming less corrupt while the wealthiest ones are growing more corrupt. The paper also concludes that exports and market capitalization are critical for prosperity and development when combined with lower corruption levels. Furthermore, the analysis also suggests that inbound foreign direct investment favors the development of emerging countries. Surprisingly, market capitalization and exports had little impact on wealth of countries before the crisis period. Moreover, integrity also fosters economic growth. Overall, the study concludes that the causes of wealth are country-specific.
Acknowledgments
I thank the editor and the reviewers for the helpful comments and suggestions that significantly enhanced this work. The usual disclaimer applies.
- Keywords
-
JEL Classification (Paper profile tab)D73, O16, O43, P48
-
References38
-
Tables11
-
Figures2
-
- Figure 1. Interactions between measures in 2008 and wealth
- Figure 2. Interactions between changes in the values of measures and wealth
-
- Table 1. List of countries
- Table 2. Example countries by the category of wealth
- Table 3. Descriptive statistics for 2008
- Table 4. Descriptive statistics for 2005
- Table 5. Pearson correlation matrix for each of the six variables for 2008
- Table 6. Pearson correlation matrix for each of the five variables for 2005
- Table 7. Main results for Model 1
- Table 8. Main results for Model 2
- Table 9. Countries, by wealth, included in ANOVA 1
- Table 10. Countries, by wealth, included in ANOVA 2
- Table 11. The fastest-growing nations in the world
-
- Acemoglu, D., & Robinson, J. A. (2012). Why Nations Fail: The Origins of Power, Prosperity and Poverty (1st ed.). New York: Crown.
- Adjasi, C. K. D., & Biekpe, N. B. (2006). Stock Market Development and Economic Growth: The Case of Selected African Countries. African Development Review, 18(1), 144-161.
- Aïssaoui, R., & Fabian, F. (2022). Globalization, economic development, and corruption: A cross-lagged contingency perspective. Journal of International Business Policy, 5, 1-28.
- Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2004). FDI and Economic Growth: The Role of Local Financial Markets. Journal of International Economics, 64(1), 89-112.
- Asiedu, E. (2006). Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability. The World Economy, 29(1), 63-77.
- Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173-1182.
- Calderón, C., & Liu, L. (2003). The Direction of Causality between Financial Development and Economic Growth. Journal of Development Economics, 72(1), 321-334.
- Campos, N. F., Dimova, R. D., & Saleh, A. (2010). Whither corruption? A quantitative survey of the literature on corruption and growth (IZA Discussion Paper No. 5334).
- Central Intelligence Agency (CIA). (2012). The CIA World Factbook 2012. New York, NY: Skyhorse Publishing, Inc.
- Cieślik, A., & Goczek, Ł. (2018). Control of corruption, international investment, and economic growth – Evidence from panel data. World Development, 103, 323-335.
- Colpan, A. M., Hikino, T., & Lincoln, J. R. (2010). The Oxford handbook of business groups. Oxford: Oxford University Press.
- d’Agostino, G., Dunne, J. P., & Pieroni, L. (2016a). Government spending, corruption and economic growth. World Development, 84, 190-205.
- d’Agostino, G., Dunne, J. P., & Pieroni, L. (2016b). Corruption and growth in Africa. European Journal of Political Economy, 43, 71-88.
- Field, A. (2009). Discovering Statistics Using SPSS for Windows (3rd ed.). London: Sage.
- Graff, M. (2003). Financial Development and Economic Growth in Corporatist and Liberal Market Economies. Emerging Markets Finance and Trade, 39(2) 47-69.
- Hansen, H., & Rand, J. (2006). On the Causal Links between FDI and Growth in Developing Countries. The World Economy, 29(1), 21-41.
- Huang, C. (2016). Is corruption bad for economic growth? Evidence from Asia-Pacific countries. The North American Journal of Economics and Finance, 35, 247-256.
- Jung, W. S. (1986). Financial Development and Economic Growth: International Evidence. Economic Development and Cultural Change, 34(2), 333-346.
- Luintel, K. B., Khan, M., Arestis, P., & Theodoridisa, K. (2008). Financial structure and economic growth. Journal of Development Economics, 86(1), 181-200.
- Mo, P. H. (2001). Corruption and Economic Growth. Journal of Comparative Economics, 29(1), 66-79.
- Moyo, D. (2009). Dead Aid: Why Aid is Not Working and How There is Another Way for Africa. London: Bloomsbury.
- Naim, M. (2000). Washington consensus or Washington confusion? Foreign policy, 118, 86-103.
- Narayan, P. K., & Smyth, R. (2009). Multivariate Granger Causality between Electricity Consumption, Exports and GDP: Evidence from a Panel of Middle Eastern Countries. Energy Policy, 37(1), 229-236.
- Owusu-Nantwi, V., & Erickson, C. (2019). Foreign direct investment and economic growth in South America. Journal of Economic Studies, 46(2), 383-398.
- Piore, M., & Cardoso, C. F. (2017). SENAI+ ISIs: the Silicon Valley consensus meets organizational challenges in Brazil (MIT-IPC Working Paper 17-005). Cambridge, MA: MIT Industrial Performance Center.
- Qu, G., Slagter, B., Sylwester, K., & Doiron, K. (2019). Explaining the standard errors of corruption perception indices. Journal of Comparative Economics, 47(4), 907-920.
- Radikoko, I., Mutobo, S. A., & Mphoeng, M. (2019). The Impact of Stock Market Development on Economic Growth: The Case of Botswana. International Journal of Economics and Finance, 11(12), 149-159.
- Rodrik, D. (2006). Goodbye Washington consensus, hello Washington confusion? A review of the World Bank’s economic growth in the 1990s: learning from a decade of reform. Journal of Economic literature, 44(4), 973-987.
- Sachs, J. D., & Warner, A. M. (2001). Natural Resources and Economic Development: The Curse of Natural Resources. European Economic Review, 45(4-6), 827-838.
- Schumpeter, J. A. (1911). The Theory of Economic Development. Cambridge, MA: Harvard University Press.
- Swaleheen, M. (2011). Economic growth with endogenous corruption: an empirical study. Public Choice, 146(1), 23-41.
- Taylor, J. (2010, November 10). Another year, Another EU Audit SAGA. The Economic Voice.
- Thurman, W. N., & Fisher, M. E. (1988). Chickens, Eggs, and Causality, or Which Came First? American Journal of Agricultural Economics, 70(2), 237-238.
- Transparency International. (2012). Corruption Perceptions Index 2012.
- Tsanana, E., Chapsa, X., & Katrakilidis, C. (2016). Is growth corrupted or bureaucratic? Panel evidence from the enlarged EU. Applied Economics, 48(33), 3131-3147.
- Uberti, L. J. (2022). Corruption and growth: Historical evidence, 1790–2010. Journal of Comparative Economics, 50(2), 321-349.
- Ugur, M. (2014). Corruption’s direct effects on per-capita income growth: A meta-analysis. Journal of Economic Surveys, 28(3), 472-490.
- Wernerheim, C. M. (2000). Cointegration and Causality in the Exports-GDP Nexus: The Post-War Evidence for Canada. Empirical Economics, 25(1), 111-125.
-
Impact on poverty and income inequality in Malaysia’s economic growth
Rabiul Islam 
,
Ahmad Bashawir Abdul Ghani ,
Irwanshah Zainal Abidin ,
Jeya Malar Rayaiappan
doi: http://dx.doi.org/10.21511/ppm.15(1).2017.05
Problems and Perspectives in Management Volume 15, 2017 Issue #1 pp. 55-62 Views: 11846 Downloads: 5652 TO CITE АНОТАЦІЯPoverty and income inequality are extreme issues that still exist in Malaysia. Any rise in poverty and income inequality definitely affect economic growth. There are many great efforts taken by the government of Malaysia to eradicate poverty and to reduce the gap of income inequality which occurs since 1970’s. The incidence of poverty and income inequality is higher in rural areas compared to urban areas. This paper is mainly to study the level of poverty and income inequality in Malaysia together with government intervention to develop Malaysia’s economic growth. The research is focused among the working people at Ipoh, Perak. In this paper, questionnaire forms are being distributed to get information regarding the issue of poverty and income inequality. It also looks into the strategies taken by the government of Malaysia to eradicate poverty and income inequality. Few recommendations are given in terms of education policy, financial aid and assistance from government and non-government organization (NGO) to upgrade the standard and quality of living among the poor and lower-income group of people.
-
Impact of inflation on economic growth: evidence from Nigeria
Anthony Olugbenga Adaramola ,
Oluwabunmi Dada
doi: http://dx.doi.org/10.21511/imfi.17(2).2020.01
Investment Management and Financial Innovations Volume 17, 2020 Issue #2 pp. 1-13 Views: 8998 Downloads: 5249 TO CITE АНОТАЦІЯIn an attempt to examine the influence of inflation on the growth prospects of the Nigerian economy, the study employs the autoregressive distributed lag on the selected variables, i.e. real gross domestic product (GDP), inflation rate, interest rate, exchange rate, degree of economy`s openness, money supply, and government consumption expenditures for the period 1980–2018. The study findings indicate that inflation and real exchange rate exert a significant negative impact on economic growth, while interest rate and money supply indicate a positive and significant impact on economic growth. Other variables in the model depict no influence on the economic growth of Nigeria. The causality result shows the unidirectional relationships between interest rate, exchange rate, government consumption expenditures and gross domestic product. However, inflation and the degree of openness show no causal relationship with gross domestic product. As a result, the study recommends that a more pragmatic effort is needed by the monetary authorities to target the inflation vigorously to prevent its adverse effect by ensuring a tolerable rate that would stimulate the economic growth of Nigeria.
-
Formalization of the impact of imbalances in the movement of financial resources on economic growth of countries in Central and Eastern Europe
Serhiy Kozmenko ,
Maxim Korneyev
doi: http://dx.doi.org/10.21511/afc.01(1).2017.06
Accounting and Financial Control Volume 1, 2017 Issue #1 pp. 48-58 Views: 7839 Downloads: 1371 TO CITEThe article deals with the impact of financialization on economic growth in countries of Central and Eastern Europe. It determinesthe impact of imbalances in the movement of financial resources caused by financialization on economic growth of these countries. It proves that the implementation of measures aimed at increasing the openness of the economy and maintaining solvent demand have a positive impact on economic growth of the surveyed countries in the long run. It also proves the importance of developing a set of measures of strategic nature regulating imbalances in the movement of financial resources caused by financialization.
