Effects of Globalization and Corruption on the Outward FDI in OECD Countries

The paper investigates impacts of globalization and corruption-free on the outward foreign direct investment (FDI) for 22 OECD countries. The baseline model confirms the positive link of home and host country gross domestic product (GDP) per capita and Linder's hypothesis, home and host size of GDP and its similarity, host agglomeration of multinational enterprises, common currency euro, and the negative link with geographical distance. The results for the effects of globalization and corruption-free on the outward FDI are mixed The significant positive association pertained to home and host country economic globalization is confirmed, but the significant negative association pertained to home and host county social globalization. The significant positive association of outward FDI with the corruption-free in host country and the significant negative association with the corruption-free in home country and for corruption similarity suggest FDI outflows from low corruption-free home country to high corruption-free host country. This finding implies FDI preference for corruption-free economically globalized OECD host countries.