Developed Countries

In this paper, we address the question that does FDI alone affect economic growth or interaction of FDI and human capital is required to boost economic growth. We develop the model with an expanding variety of products. We estimate the model using some advanced tests utilizing data on FDI flows from developed countries. We find stronger complementary effects between FDI and human capital on the productivity growth rate instead of having them as separate variables. This result is consistent with the idea that the flow of advanced technology brought along by FDI can increase the growth rate of the host economy only by interacting with that country's absorptive capability. JEL Classification: F21: O49

Based on the theoretical literature, there are different and sometimes conflicting approaches about the effects of the shadow economy on per capita income. Considering the importance of this issue for economic policy, this study examines the effects of the shadow economy on per capita income for the period of 2005- 2017 using a panel generalized two stage estimator (PG2SLS) in two groups of developing and developed countries. Based on the results obtained in both groups, the size of the shadow economy has a negative effect on the per capita income. Also, the effects of the shadow economy on per capita income in developed countries are much higher than in developing countries, which is somewhat countrary to the theoretical framework. Stimating the model with the assumption of endogeneity of the shadow economy, for developing countries these effects have become negative and significant, but for developed countries these effects do not have the necessary significance.

The importance of investment and the necessity for its legality, alongside the occurrence ofcorruption due to the involvement of multiple actors in the investment process, render itsexamination - especially in arbitration - unavoidable. Corruption may manifest through foreigninvestors and pressures from their home states or affiliated intermediaries, taking the form ofbribery and collusion with domestic officials of the host state or through threats against them.Furthermore, the emergence of corruption may stem from structural weaknesses or corruption-laden processes within the host state’s system. At times, a combination of all the aforementionedfactors, alongside the involvement of third parties, can create a corrupt and illegal investmentprocess. Given the private nature of arbitration, the primary question arises: does an arbitraltribunal possess the jurisdiction and authority to examine and determine the liability of each ofthe aforementioned actors? Through an analytical and documentary investigation, this articleestablishes that, firstly, arbitral tribunals generally do not have the power to investigate criminalbehavior and related inquiries; secondly, due to secrecy and threats against witnesses, collectingand maintaining the security of evidence within the sovereign territory of the host state ischallenging; thirdly, ICSID tribunals often rely on the “balance of probabilities” and significantlyon “red flags” and reports from anti-corruption organizations. Fourthly, the consideration of theinitiating factor of corruption, the degree of influence of participating actors (the prevalenceof corruption in the host state and the level of the host state’s involvement in the occurrenceof corruption), as well as the circumstances of “duress” and “hostage” situations and thenature of the bribe (transactional / variance), may lead, depending on the case, to the completecondemnation of the investor ( and a finding that the investment is unjust) or a reduction ofliability or immunity for the host state.