The underlying dissertation analyses the effect of corruption and the informal economy on regional and global investment dynamics. Relevant theory is evaluated and gravity models are applied to show the above-mentioned effects on foreign direct investments (FDI). In the first empirical analysis, the author shows that an increase in a country's corruption levels increases the FDI flows said country receives. For the origin countries of FDI, the effect is reversed. Lower levels of corruption are associated with higher levels of FDI flows, which could result from the origin countries usually being richer countries, and richer countries often have lower levels of corruption and a better rule of law. The second and third analysis focuses on the informal economy. Here, the author shows that countries with a bigger informal economy receive more FDI suggesting that multinational companies (MNCs) take advantage of characteristics of the informal economy of a target country of FDI, e.g., lower labor costs though subcontracting to an enterprise active in the informal economy. Additionally, through an interaction term, the author can show that an increase in government size increases the effect that the informal economy has on FDI inflows. These findings are robust over several specifications and datasets. All three analyses show that MNCs can and will take advantage of corruption and the informal economy in order to maximize their profits.