DAI Liyan  WANG Ziyuan

（School of International Economics and International Relations, Liaoning University, Shenyang 110136, China）

Abstract: Based on the research of the impact mechanism of corruption on international investment, this paper uses investment data of global Sovereign Wealth Funds (SWFs) from 1974 to 2017 to analyzes the impact of the host country’s corruption environment as well as the corruption distance between the two countries on the investment decision-making of SWFs. The results show that in host countries with higher levels of corruption, SWFs have lower investment willingness and investment amount. At the same time, when the home country is more corrupt than the host country, the greater the corruption distance, the smaller SWFs investment. However, different from other investors, when the host country is more corrupt than the home country, the greater the corruption distance, the greater the SWFs investment. This result affirms the positive role of SWFs in the international capital market, precisely because SWFs have a certain adaptability to the corrupt investment environment. To a certain extent, it can alleviate the problem of capital shortage faced by countries with deteriorating investment environment caused by corruption.

About the author:

Dr. Dai Liyan is a professor at Research Center for the Economies and Politics of Transitional Countries, Research Center for D.P.R.K and R.O.K, and School of International Economics and International Relations of Liaoning University. She is engaged in the study of sovereign wealth fund.