Int J Fin Econ - 2020 - Kwabi - Foreign equity portfolio flow and corruption A cross%E2%80%90country evidence.pdf (1.23 MB)
Foreign equity portfolio flow and corruption: a cross-country evidence
journal contribution
posted on 2023-06-15, 20:38 authored by Frank Kwabi, Agyenim Boateng, Samuel FosuSamuel Fosu, Ting Ting Zhu, Marian Chijoke-MgbameThis study examines the impact of foreign equity portfolio investment on corruption. Employing a large dataset of 44 countries from 2001 to 2015 and three different measures of corruption, our results show that foreign investors from well-governed countries tend to foster public accountability, reduce asymmetry information and corruption. We find empirical evidence that foreign equity portfolio investment interacts with stock market development and central bank transparency to reduce corruption. Our results suggest that stock market development and central bank transparency are regarded as complementary by international portfolio investors. Further analysis indicates that corruption appears more prevalent in countries where domestic investors dominate the stock market. Our results are robust to endogeneity using dynamic generalized methods of moments (GMM). The findings suggest that attracting foreign equity investors reduces corruption, implying significant benefits for portfolio diversification.
History
Publication status
- Published
File Version
- Published version
Journal
International Journal of Finance and EconomicsISSN
1076-9307Publisher
WileyExternal DOI
Issue
1Volume
27Page range
68-87Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2022-05-11First Open Access (FOA) Date
2022-05-11First Compliant Deposit (FCD) Date
2022-05-11Usage metrics
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