This paper is a systematic attempt to establish the effect of anti-money laundering (AML) systems on FDI flows across the globe. Complex and related hypotheses are tested using data from 2012 to 2018 across 165 economies across different continents, income levels, and regulatory environments. First, the paper examines the effect of AML systems on FDI flows. Second, the paper examines the nonlinearities of the AML systems-FDI nexus. Third, the paper examines if host country peculiarities such as an offshore financial centre (OFCs) or originating from Africa alter this relationship. The paper employs the two-step system GMM and the dynamic panel threshold regression techniques to test the hypotheses of the study. Generally, the paper provides evidence that AML systems positively promote FDI inflows. However, the paper finds that AML structures dampen FDIs inflows for OFCs. Further, the paper finds that the influence of AML systems on FDIs is threshold-specific. Specifically, AML systems positively impact FDIs below the threshold for our full, developing, and African country samples. At the same time, the study finds a negative impact of AML structures on FDIs above the threshold value for our full sample and developing countries. However, for Africa, the study provides evidence of a positive impact of AML systems on FDIs across the different AML structures. Again, the study finds that AML systems negatively impact FDI across all AML structures for offshore financial centres. The findings of the study provide insights into the importance of AML systems in influencing MNEs’ FDI decisions to a country.

Purpose: This study examines the influence of anti-money laundering (AML) regulations on the financial development-economic growth nexus around the world.Design/methodology/approach: The study uses data from 165 countries spanning continents, income levels, and regulatory regimes from 2012 to 2018. The Prais–Winsten (1954) and Hansen (2000) panel threshold estimation approaches were used to assess the study's hypothesized relationships.Findings: Financial development, according to the research, generally stimulates economic growth. However, the authors find evidence of AML regulations' threshold effect on the finance-growth connection, with the impact of finance on growth being positive below the threshold value. Above the threshold, however, the authors observe a negative influence. Further, the authors find that AML regulations have a considerable detrimental impact on the finance-growth nexus over the threshold for developed countries. However, the authors find a positive but insignificant effect of finance on growth below the AML regulations threshold for African countries, while finance positively impacts growth above the AML regulations threshold.Practical implications: The findings of the study imply that countries must make conscious efforts to combat the incidence of money laundering by establishing policies to improve financial transparency and standards, promoting public sector transparency and accountability, reducing legal and political risk, and combating bribery and corruption.Originality/value: This study contributes to the literature as it is the first attempt to examine the moderating role of AML regulations in the finance-growth nexus. Also, the study examines the threshold effect of how AML regulations impact the finance-growth nexus.

Purpose: – The purpose of this study is to examine the relationship between regulation of non-bank financial institutions (NBFIs) and their performance in Ghana. Design/methodology/approach: – The analysis is performed using data derived from the Bank of Ghana Database during a five-year period, 2006-2010. Correlated panels corrected standard errors model is used to estimate the regression equation. Capital adequacy requirements and the restrictions on the ability of non-bank financial institutions (NBFIs) to take deposits are used as proxies for regulatory pressure. The study also used the return on assets (ROA) and return on equity (ROE) as measures of NBFI performance. Findings: – Results of the study emerged with the evidence that there exists a positive relationship between minimum capital adequacy requirement of 10 per cent and profitability. This indicates that asking NBFIs to keep higher minimum capital adequacy ratio has resulted in improving their profitability. This suggests that capital regulation is an effective tool in enhancing the stability and the profitability of the financial services sector. In addition, the paper finds a positive relationship between regulatory pressure in terms of restrictions on deposits and NBFI profitability. This means that non-deposit-taking NBFIs have improved performance. This indicates that restricting NBFIs in terms of deposit-taking rather goes to increase profitability. Originality/value: – The value of this study is in respect of its contribution to the extant literature on financial regulation and performance of NBFIs.