THE RELATIONSHIP BETWEEN KEY FACTORS IN FOREIGN DIRECT INVESTMENT AND THE ADOPTION OF INTERNATIONAL CODE OF ETHICS

Leonard Branson
Nicole Yoder
University of Illinois Springfield

ABSTRACT

This study investigates the relationship between five-key factors in Foreign Direct
Investment (FDI) and the adoption of the International Code of Ethics in developed and
developing countries. The five-key factors in FDI are: Corruption Perception Index (CPI),
country’s total population, country’s literacy rate, trade and economic freedom score, and
corporate tax rate. The results of this study revealed there are significant relationships between
three-key factors in FDI (Trade and Economic Freedom score, country’s literacy rate and
corporate tax rate) and the adoption of the International Code of Ethics in the surveyed developed
and developing countries. It was also found that there were no significant relationships between
the other two-key factors in FDI (corruption Perception Index and country’s total population) and
the adoption of the International Code of Ethics in the same countries.

Keywords: Corruption Perception Index, country’ literacy rate, corporate tax rate, Foreign Direct Investment, the
adoption of the International Code of Ethics