Is There a Relationship Between Transparency in Economic and Political Systems and Foreign Direct Investment Flows?

: By using information for a vast number of countries, concerning inward Foreign Direct Investment (FDI) performance and perceived level of corruption, the paper analyzes how transparency, as a reverse measure of corruption, influences FDI. This is done by a fuzzy logic approach in order to determine conceivable clusters in the FDI-transparency space. In two different periods, the use of fuzzy clustering techniques reveals the existence of two well-defined clusters: one is formed by the countries having high-level corruption, where, indeed, transparency is positively correlated, in a significant way, to FDI, and the other is formed by the countries having low-level corruption, where the influence of corruption on FDI is not so evident.