A cross-country inquiry into the effect of human rights violations on foreign direct investment inflow: Hypocrisy or sincerity?
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The present study’s aim is to quantitatively explore the relationship between human rights violations and FDI inflow. Due to discrepancies in the existing literature giving rise to two opposing views (i.e. the traditional view and the contemporary view), there is ambiguity surrounding the exact nature of the relationship between human rights violations and FDI inflow. Where the traditional view proposes a positive relationship between the two variables due to organizations pursuing profit maximization, the contemporary view proposes the opposite due to organizations avoiding affiliation with human rights violations out of fear of illegitimacy. By conducting three independent multiple regression analyses over 116, 139 and 138 countries respectively, the present study was able to gain deeper understanding of the current relationship between the two variables as well as their relationship over the past 30 years. Ultimately, the results of the multiple regression analyses provided evidence for the presence of a negative relationship between human rights violations and FDI inflow, both currently as well as over the past 30 years. As a result, the relationship between human rights violations and FDI appears to reflect the contemporary view as opposed to the traditional view.
Faculteit der Managementwetenschappen