other African countries in view of its obvious and anticipated beneﬁts to host economy.
Regrettably, in spite of these concerted efforts,FDI ﬂow to African countries remained low
in comparison to otherregions of the world.
Within the framework of global integration, several theoretical as well as empirical
exploits were undertaken to provide explanation in respect of FDI and its ﬂow to host
location. Among the various theories explaining the determining factors of FDI inﬂow, the
eclectic model of Dunning (1977) appears to be more prevalent because of its ability to
provide elaborate analysis with regard to ownership, location and internalization (OLI)
factors as speciﬁc advantages which affects the investment decision of multinational
corporations (MNCs). According to Dunning (2001), three conditions need to be met by a
ﬁrm to qualify as a MNC. The ﬁrst is advantage related to the ownership which involves
proprietorship of deﬁnite assets which the ﬁrms in the host location lacks, as this would
serve as compensation for extra costs of operating abroad by the ﬁrm such as expenses of
dealing with foreignauthorities, tax system, regulatory issues and preferencesof customers.
The second is internalizationadvantage which requires the beneﬁts of FDI to be internalized
by the ﬁrm to minimize technology imitation, reduce costs of transaction and preserve the
ﬁrm’s reputation through effective management. The third is location advantage which
emphasizes certain advantagesin a location such as large market, low cost of labor, quality
of infrastructure, natural resources availability, institutional quality and investment
incentives which couldmake an economy attractive destination for an MNC.
Though, Dunning did not provide an exhaustive list of advantages related to location,
but maintained that factorwhich could affect the establishment and proﬁtabilityof a ﬁrm in
the host location is considered an advantage (Ajide and Raheem, 2016). MNCs are expected
to exploit the location advantages to boost efﬁciency of their basic competencies through
participation in foreign operations (Dunning, 1988). In furtherance of the search for
understanding the main determinants of the inﬂow of FDI, evolving research efforts are
directed at exploring the role of institutional environment as a key driver of FDI inﬂow.
Accordingly, corruption as an institutional factor is increasingly attracting attention of
academic scholars becauseof its abilities to shape “the rules of the game”which could either
serve as investment incentive or deter foreign investors. Corruption is a country-speciﬁc
feature which directly relatesto locational advantages affecting foreign investment.
Accordingly, several empirical exploits have emerged to interrogate the inﬂuence of
corruption on FDI inﬂow. Exploring the link of corruption in hosting nations with MNCs’
decision, Voyer and Beamish (2004),Morrissey and Udomkerdmongkol (2012),Al-Khouri
and Khalik (2013),Mathur and Singh (2013),Quazi (2014),Abala (2014),Nnadi and
Soobaroyen (2015),Erdogan and Unver (2015),Qian and Sandoval-Hernandez (2016),
Ferreira and Ferreira (2016),Ajide and Raheem(2016),Kurul and Yalta (2017),Hossain and
Rahman (2017) and Kasasbeh, Mdanat and Khasawneh (2018) afﬁrmed that corruption is
detrimental and thereforeretards FDI inﬂow. Corruption is regarded as “sands in the wheels
of commerce,”because it generates additional ﬁnancial burden which affects the proﬁts of
MNCs directly as well as distorts MNCs’activities (Habib and Zurawicki, 2002;Wei, 2000).
Furthermore, corruption burden is not only conﬁned to bribes related expenses to access
services, but also relates to the efforts and times put in by MNCs in handling corrupt
government ofﬁcials (Kaufmann, 1997). Wei (1997) argued that the unpredictable and
irregular nature of bribes being demanded by corruptofﬁcials tend to accelerate the burden
of corruption. In addition, corruption couldspur high level of uncertainties due to its illegal
nature, because agreements or understanding relating to corrupt practices such as payment
of bribe for services cannot be enforced. This is even more worrisome when incentives to