The Impact Of Corruption On Foreign Direct Investment

With the gradual development of economic globalization and the implementation of the "Belt and Road" policy,China's trade cooperation with other countries has become closer,and China's ability to absorb and use foreign investment has also been continuously improved.In recent years,foreign direct investment(FDI)has not only injected capital into China,promoted innovation,opened up markets,and increased employment opportunities,but also brought advanced technology and management experience to China.Bringing advanced technology and management experience has created huge benefits,and has become one of the main driving forces for China's economic growth and increased productivity.China has entered a period of high-quality development,and all areas have emphasized high-quality development.The field of foreign direct investment has also shifted from the pursuit of scale effects to the pursuit of high-quality development.From the theory and practice,we can see that corruption has a certain impact on foreign direct investment.China's FDI flow is relatively optimistic,but the quality of FDI is far from quantity.The reason is that the country paid more attention to the increase of FDI flow and ignored the improvement of FDI quality.Therefore,in the context of increasing research on China's FDI and corruption directly or indirectly affecting foreign direct investment,it is of theoretical and practical significance to illustrate the impact of corruption on FDI flow and FDI quality.From a national perspective,studying the impact of corruption on FDI flow and quality is conducive to promoting the continuous improvement of China's technological progress and management level.From the perspective of the enterprise,it can help enterprises pay more attention to quality improvement rather than quantitative growth when they invest,which is conducive to greatly improving the market competitiveness of multinational enterprises and pushing their products and services to global development.By region,it can promote the scientific and effective investment decision-making of multinational companies.Combing the literature,it is found that there are three different views between corruption and FDI flow: corruption promotes the increase of FDI flow;corruption hinders the increase of FDI flow;and there is an uncertain relationship between corruption and FDI flow.Due to the low level of attention to and research on corruption and FDI quality,the relationship between corruption and FDI quality has not been subdivided.China's attraction of FDI quotas has grown steadily with the comprehensive guidance of national policies.Therefore,the scale,source and regional distribution of China's foreign direct investment have become more extensive,and the investment layout and industry structure have been deepened.Whether at the national level or the provincial level,corruption has a huge impact on the status of foreign direct investment,and FDI is extremely uneven in regional distribution.Compared with the central and western regions,the FDI flow and FDI quality attracted by the eastern region are relatively more advantageous,and the gap between the east and the west has increased.This article analyzes the impact of corruption on FDI from the macro and micro levels,explains the overall impact mechanism of corruption on foreign direct investment,and analyzes the impact mechanism of corruption on FDI flow and FDI quality.And put forward two hypotheses related to FDI flow and FDI quality: corruption promotes the increase of FDI flow,and corruption reduce the quality of FDI.Using a fixed-effects model to perform full-sample and sub-sample regression on provincial panel data from 2008 to 2016,it was found that corruption will attract increased FDI flow,and at the same time will reduce FDI quality.On the one hand,the existence of corruption has enabled multinational companies to gain more market access opportunities that are not available under normal conditions,thereby expanding scale and increasing investment,so FDI flows have increased significantly.On the other hand,corruption will lower the entry barrier for FDI,which will result in the influx of low-quality and low-quality FDI,resulting in a lower overall quality of FDI flowing into China.In summary,under the new normal of China's economy,China's economic growth should shift from the pursuit of scale effect to the pursuit of high-quality development.Economic growth depends on qualitative improvement rather than quantitative development.under the current situation of "anti-corruption and honesty" advocated by the state and "transformation and structure adjustment" advocated by the government,in order to better increase FDI flow and improve FDI quality,the country should increase anti-corruption efforts.In order to further narrow the gap between inland and coastal areas.We should Comprehensively deepen the reforms in the eastern,central and western regions.