chapter  8
10 Pages

. Falsified Prospect Theory in the Context of Corruption and Foreign Direct Investment

ByBenjamin Potz, Dominik Sporer, Christian Zirgoi, Briget Burbeck

Introduction Due to globalization and technological innovations, new investment opportunities attract the attention of companies, especially in emerging markets. As corruption is widespread, particularly in these markets, controversial discussions about the inuence of corruption on foreign direct investment (FDI) exist. is chapter is using falsication in order to test the usefulness of the prospect theory (PT) and to explain the impact of corruption on FDI in China and Russia. e results show that the widely used PT cannot serve as a theoretical model in this context.