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A panel data analysis of the effect of corruption on tourism

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  • Marie Poprawe

Abstract

This study empirically tests the hypothesis that corruption has a negative effect on tourism. Having to pay bribes while on holiday or a business trip increases the costs of travelling to a country where corruption is prevalent. Tourists are thus more likely to travel to countries where these additional costs do not need to be incurred. This hypothesis is tested using a panel data set of over 100 countries and 16 years. The results indicate that a 1-point increase in the Corruption Perception Index (implying a decrease in corruption) results in a 2% to 7% increase in tourist inflows. In addition, tourist inflows rise with GDP per capita, openness and growth and are higher in countries with a temperate climate.

Suggested Citation

  • Marie Poprawe, 2015. "A panel data analysis of the effect of corruption on tourism," Applied Economics, Taylor & Francis Journals, vol. 47(23), pages 2399-2412, May.
    • Handle: RePEc:taf:applec:v:47:y:2015:i:23:p:2399-2412
    DOI: 10.1080/00036846.2015.1005874
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    1. Robert Lanquar, 2011. "Tourism in the MED 11 Countries," CASE Network Reports 0098, CASE-Center for Social and Economic Research.
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    Cited by:

    1. Krambia-Kapardis Maria & Stylianou Ioanna & Demetriou Salomi, 2022. "Nonlinear nexus between corruption and tourism arrivals: a global analysis," Empirical Economics, Springer, vol. 63(4), pages 1997-2024, October.
    2. Thomas Habanabakize & Lerato Mothibi, 2024. "The Implication of Political Risk and Specific Macroeconomic Variables on Total Revenue in Tourism Industry," International Journal of Economics and Financial Issues, Econjournals, vol. 14(3), pages 170-177, May.
    3. Rana Ejaz Ali Khan & Tusawar Iftikhar Ahmad & Jaweria Haleem, 2021. "The Governance and Tourism: A Case of Developing Countries," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 9(3), pages 199-213, September.
    4. Konstantakopoulou, Ioanna, 2022. "Does health quality affect tourism? Evidence from system GMM estimates," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 425-440.
    5. Joey Pek U Sou & Thea Vinnicombe, 2023. "Does governance quality matter for FDI-led tourism development? A supply-side perspective," Tourism Economics, , vol. 29(2), pages 392-408, March.
    6. Ngassam, Sylvain B. & Asongu, Simplice A. & Ngueuleweu, Gildas Tiwang, 2024. "A revisit of the natural resource curse in the tourism industry," Resources Policy, Elsevier, vol. 88(C).
    7. Manisha Chakrabarty & Subhankar Mukherjee, 2022. "Financial Inclusion and Household Welfare: An Entropy-Based Consumption Diversification Approach," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1486-1521, June.
    8. Yang, Yang & Xue, Lan & Jones, Thomas E., 2019. "Tourism-enhancing effect of World Heritage Sites: Panacea or placebo? A meta-analysis," Annals of Tourism Research, Elsevier, vol. 75(C), pages 29-41.
    9. Khusen Ibragimov & José Perles-Ribes & Ana Ramón-Rodríguez, 2022. "The impact of governance quality on inbound tourism demand of Central Asia," Economics Bulletin, AccessEcon, vol. 42(2), pages 1050-1061.
    10. Muhammad Athar Nadeem & Zhiying Liu & Yi Xu & Kishwar Nawaz & Muhammad Yousaf Malik & Amna Younis, 2020. "Impacts of terrorism, governance structure, military expenditures and infrastructures upon tourism: empirical evidence from an emerging economy," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 185-206, March.
    11. Li, Cheng & Ge, Peng & Liu, Zhusheng & Zheng, Weimin, 2020. "Forecasting tourist arrivals using denoising and potential factors," Annals of Tourism Research, Elsevier, vol. 83(C).
    12. Law, Rob & Li, Gang & Fong, Davis Ka Chio & Han, Xin, 2019. "Tourism demand forecasting: A deep learning approach," Annals of Tourism Research, Elsevier, vol. 75(C), pages 410-423.
    13. Samuel Bates, 2021. "A Glance at Tourism Economics over the last decade [Coup d'œil sur l'Économie du Tourisme de la dernière décennie]," Post-Print hal-03263048, HAL.
    14. Azmat Gani & Michael D. Clemes, 2017. "The main determinants effecting international visitor arrivals in New Zealand," Tourism Economics, , vol. 23(5), pages 921-940, August.
    15. Wanvilai Chulaphan & Jorge Fidel Barahona, 2021. "The Determinants of Tourist Expenditure Per Capita in Thailand: Potential Implications for Sustainable Tourism," Sustainability, MDPI, vol. 13(12), pages 1-14, June.
    16. Fu, Guomin & Zhu, Sijia, 2023. "Innovation, financial risk and natural resources for sustainable development: Fresh evidence from BRICS economies," Resources Policy, Elsevier, vol. 80(C).
    17. Hassan F. Gholipour & Behzad Foroughi, 2020. "Corruption and outbound business travels," Tourism Economics, , vol. 26(7), pages 1266-1281, November.
    18. Nicola Camatti & Luca Salmasi & Jan van der Borg, "undated". "Tourism and economic growth: an application to coastal regions in the Mediterranean area," Working Papers 2021:16, Department of Economics, University of Venice "Ca' Foscari".
    19. Ghialy Yap & Shrabani Saha & Nelson O Ndubisi & Saif S Alsowaidi & Ali S Saleh, 2023. "Can tourism market diversification mitigate the adverse effects of a blockade on tourism? Evidence from Qatar," Tourism Economics, , vol. 29(4), pages 880-905, June.
    20. Ahmed Muhamad Omer & Mehmet Yeşiltaş, 2020. "“Modeling the impact of wars and terrorism on tourism demand in Kurdistan region of Iraq”," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 19(3), pages 301-322, September.

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