Corruption effect on foreign direct investments in European Union countries
The authors of the article analyze the effect of corruption on foreign direct investments in most corrupt European Union countries. Corruption in the context of the analysis is understood as an act where government officials enter into an agreement with a foreign investors against the interest of society. It takes place when illegal payments for government are made. Such payments acts as an additional tax on investments in foreign country, thus decreasing attractiveness of investment for foreign investors. There are various types of corruption, but most common classification includegrandcorruption,pettycorruption and public sector corruption. However, this article focuses on the effect ofgrandcorruption, because it directly affectsFDIinflows in particular country. Results of the research made by the authors shows that corruption has adverse effect onFDIinflows, however particular corrupt actions may postively effectFDIinflows. In order to determine corruption effect onFDIin corrupt EU countries statistical analysis of 2000–2014 period has been implemented and conceptual model of effect onFDIcreated.