Effect of corruption on the attractiveness of foreign direct investments in the West African Economic and Monetary Union

Abstract

The aim of this article is to analyze the effect of corruption control on the attractiveness of foreign direct investments (FDI) in the West African Economic and Monetary Union (WAEMU) zone. To do this, we used the Autoregressive Scaled Delay (ARDL) method with the Pooled Mean Group (PMG) estimator on a panel of eight countries, during the period 2002-2021. The results reveal on the one hand, that in the long term the control of corruption has a negative and significant effect on the attractiveness of FDI and on the other hand, the growth of GDP per capita, infrastructure and internal investment have positive and significant effects on net inward FDI flows. These results invite WAEMU member states to implement reforms to their anti-corruption measures, in order to create an economic environment to attract more FDI.

Keywords: corruption, FDI attractiveness, WAEMU, ARDL, PMG.

JEL Classification : C23, C33, E52, F40

Type of article: applied research