Do political instability, terrorism, and corruption have deterring effects on tourism development even in the presence of UNESCO heritage? A cross-country panel estimate

This article evaluates the effects of political instability, terrorism, and corruption on tourism development, particularly UNESCO-listed heritage destinations. Using a fixed-effects panel data analysis for 139 countries over the period 1999-2009, the result reveals that a one-unit increase in political instability decreases tourist arrivals and tourism revenue between 24 and 31 and 30 and 36, respectively. Furthermore, in the presence of heritage, terrorism has negative effects on tourism demand even though its effect is lower than that of political instability. However, the study shows that an increase in corruption index would not have an adverse influence on tourist arrival numbers, particularly for those countries that have historical and natural heritage. Perhaps, many experienced travelers have expectations that they would require paying bribes to corrupt authorities for travel visa or permits to some tourist destinations in order to make things accessible. Moderation effect results indicate that political instability reduces tourism demand even in UNESCO-listed heritage destinations © 2013 Cognizant Comm. Corp

Corruption, shadow economy and income inequality: evidence from Asia

A number of recent studies for Latin America show that as the size of the informal economy grows, corruption is less harmful to inequality. We investigate if this relationship is equally compelling for developing countries in Asia where corruption, inequality and shadow economies are considerably large. We use Panel Least Square and Fixed Effects Models for Asia to find that both ‘Corruption Perception Index’ and ‘ICRG’ index are sensitive to a number of important macroeconomic variables. We find that in the absence of the shadow economy, corruption increases inequality. However, with larger shadow economies in South Asia, the income inequality tends to fall

Investigating the interaction effect of democracy and economic freedom on corruption: a cross-country quantile regression analysis

This paper explores the interaction effects of economic freedom and democracy in controlling corruption for 100 countries by using quantile regression technique. The main contribution is to explore the interaction effects throughout conditional distribution of corruption across nations. Our results reinforce some findings in the literature, but also provide new conclusions. The findings suggest a stronger and significant interaction effect in reducing corruption, especially in the most-corrupt countries. However, democratic and economic freedoms alone may not cure corruption effectively in the most-corrupt nations, a sound democratic reform can eliminate corruption substantially only after achieving a threshold level of economic freedom

The Corruption-Growth Relationship: Does the Political Regime Matter?

Corruption is widely believed to have an adverse effect on the economic performance of a country. However, many East and Southeast Asian countries either achieved or currently are achieving impressively rapid economic growth despite widespread corruption- the so-called East-Asian-Paradox. A common feature of these countries was that they were autocracies. We re-examine the corruption-growth relationship, in light of the East-Asian-Paradox. We examine the role of political regimes, in mediating corruption-growth relationship using panel data over one hundred countries for the period 1984-2016. We find clear evidence that corruption-growth relationship differs by the type of political regime, and the growth enhancing effect of corruption is more likely in autocracies than in democracies. The marginal effect analysis shows that in strongly autocratic countries, higher corruption may actually lead to significantly higher growth, while this is not the case in democracies. Alternatively, democracy is not good for growth if there is a high level of perceived corruption. We provide suggestive evidence that the mechanism by which corruption is growth enhancing in autocracies is through the perceived credibility of commitment of ruling political elites to economic freedom, thereby providing confidence to the firms to invest, leading to long-term growth

Corruption and growth: a complex relationship

Purpose This paper investigates the growth-corruption relationship in a sample of 146 countries for the period 1984-2009. While negative effects of corruption on growth have drawn economists’ interest in recent years, our main contribution is to examine the effects by employing the hierarchical polynomial regression to evaluate the relationship after controlling economic and institutional factors. Design/methodology/approach The results are estimated using panel generalized methods of moments. Findings The results challenge some of the findings that negative growth-corruption association in the literature, but also provide some new inferences. The findings reflect that corruption is not always growth-inhibitory, for some countries it is growth-enhancing which supports the “greasing-the-wheels” hypothesis. Originality/value The paper investigates the growth-corruption relationship using panel generalised methods of moments. Our results suggest that a cubic function best fitted the data. The finding suggests that in the medium corrupt countries corruption stimulates growth by reducing red-tape

Exchange rate pass-through and inflation in Australia, China and India: a comparative study with disaggregated data

This article analyses the exchange rate shocks and its pass-through to various level of prices in two emerging economies and one developed country by employing a structural VAR framework over the period 1990-2011. We assess the pass-through into import, export, producer and consumer prices in Australia, China and India in industries including mining, agriculture and manufacturing. We test whether the exchange rate pass-through to import prices is more complete in any particular sector and estimate the pass-through to consumer prices to investigate whether there is any linkage between the pass-through and the average inflation rate across these countries. The impulse responses indicate that exchange rates have less effect in the rising mining and natural resources prices in Australia than China and India. Moreover, pass-through of exchange rate to aggregate consumer prices is greater in China and India than Australia. This will have important policy implication for the monetary authorities

Exploring the nexus between tourism demand and cultural similarity

This paper attempts to bring an economic underpinning to tourism research. It uses the gravity model to derive an econometric model to explore the relationship between cultural similarity and tourism demand, with special reference to Australia inbound tourism from 42 source countries. Since language and religion are thought to be the main exposition and carrier of culture, we developed a continuous, normalized, and time variant index to capture the similarity in language and religious profile between a source country and Australia. The inclusion of these indexes in an empirical model yields OLS and quantile results that support the belief that there is a close link between culture similarity and tourism demand

Does tourism sustain the economic growth? A wavelet based evidence from United States

This study explores the relationship between tourism development and economic growth in high tourist arrival country such as the United States of America (USA) by adopting the wavelet transform approach using monthly data over the period 1996M01-2015M08. Three innovative techniques that are continuous wavelet, wavelet coherence power spectrum and wavelet based Granger causality that consider the decomposition of time-series at different time frequencies, are utilized to conduct the study. The results of autoregressive distributed lag and combine cointegration tests show that there is a significant long-run relationship occurs between tourism development and economic growth in USA. Furthermore, the results indicate that there is a unidirectional causal influence of economic growth on tourism development in the short-run whereas, in the long-run the opposite causal relationship is evident in USA. Thus it can be recommended that government needs to increase and promote tourism demand and further providing and nurturing the expansion of tourism supply with the advancement of economic growth