The Impact Of Corruption And Anti-corruption On Foreign Direct Investment

Corruption is a serious problem that China is facing in the economic transition period.The relationship between foreign direct investment and administrative corruption has also attracted the attention of many scholars.In many studies on the impact of administrative corruption on foreign direct investment,we find that the relationship between the two is not clear.Some scholars believe that corruption can promote foreign direct investment,while others believe that corruption will restrain foreign direct investment.Personally speaking,corruption,as a system factor that distorts market equity,should restrain the whole economic environment,including foreign direct investment.However,the theory cannot be separated from the evidence of empirical data.This paper attempts to clarify the impact mechanism of corruption and anti-corruption on FDI respectively.This paper studies the influence of corruption and anti-corruption on foreign direct investment.The first problem to be solved is how to measure corruption and anti-corruption.Anti-corruption,as a means of governance by the national leadership,expresses the determination and strength of Chinese leaders in tackling corruption,which is characterized by openness and transparency.Therefore,through the mass media and other means,how to measure anti-corruption efforts is still available.As an institutional problem left over from history,corruption is a problem that most people are very secretive about.It is very difficult to collect information and receipts about corruption.How to measure the degree of corruption in China has not given a specific indicator system.Referring to the methods of Wang Feng and Yao Shujie,this paper measures the anti-corruption intensity by comparing the number of corruption keywords appearing in party newspapers of various provinces and cities with the total number of articles.By referring to the classic production function,the number of cases of corruption and malfeasance is regarded as the result of the joint action of corruption and anti-corruption intensity.By taking logarithm and first-order difference methods,unknown parameters are estimated,so as to find the corruption measurement index from the data of known cases and anti-corruption intensity.In addition,this paper also proposed two corruption measurement methods.The first is to regard the number of cases filed in that year as the result of corruption in the current period and the previous period,that is,the number of cases filed in that year is converted from corruption in that year and in previous years,and the number law of such transformation conforms to the characteristics of exponential decay,so what we need is to get the value of all unknown parameters.The second method is similar to that of wang feng et al.,except that the method of obtaining corruption is different.In this method,this paper proves that corruption can be decomposed according to a certain method of panel data through the test method of panel data.At this point,this paper has obtained the more controversial data required by the research.In the empirical process,this paper firstly selects panel data of 30 provinces and cities in China from 2003 to 2016 to establish a dynamic panel data model.Due to the endogeneity of the model,difference GMM method is adopted to estimate the model.The following results are obtained:1.Corruption has a definite negative effect on foreign direct investment,that is,administrative corruption will restrain the inflow of foreign capital.2.The influence of anti-corruption on foreign direct investment is related to the degree of corruption.When the degree of corruption is low,anti-corruption is positively correlated with FDI,that is,anti-corruption will promote FDI.When the degree of corruption is high,anti-corruption is negatively correlated with FDI,that is,anti-corruption will restrain FDI.Finally,based on the results of empirical analysis,this paper puts forward relevant policy recommendations,and summarizes the deficiencies of this paper.