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A new area of research has recently emerged that analyzes the impact of corruption on foreign direct investment (FDI) in developing countries. The FDI literature comprises two opposing views of corruption-the grabbing hand hypothesis holds that corruption impedes FDI by raising uncertainty and transaction costs and the helping hand hypothesis holds that corruption facilitates FDI by greasing the wheels of commerce in the presence of weak regulatory frameworks. This study analyzes the impact of corruption on FDI inflows in 53 countries in Africa over the 1995-2012 period. Using the dynamic System Generalized Method of Moments modeling framework (Arellano-Bover/Blundell-Bond linear dynamic panel), this study finds support for the helping hand hypothesis, i.e., corruption facilitates FDI inflows in Africa. It is likely that the overall regulatory environment in Africa is weak, which helps explain the context in which the helping hand hypothesis can be validated. In addition, this study finds that past levels of FDI, market size, government effectiveness, infrastructure, and economic freedom also affect FDI significantly. These results further our knowledge of the FDI dynamics in Africa, which policymakers should find helpful in devising pro-FDI strategies.

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