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Purpose This paper aims to apply regression-tree analysis to capture the nonlinear effects of corruption on economic growth. Using data of 103 countries for the period 1996–2017, the authors endogenously detect two distinct areas in corruption quality in which the members share the same model of economic growth. Design/methodology/approach The authors apply regression tree analysis to capture the nonlinearity of the influences. This methodology allows us to split endogenously the whole sample of countries and characterize the different ways through which corruption impacts economic growth in each group of countries. Findings The traditional determinants of economic growth have different impacts on countries depending on their level of corruption, which, in turn, confirms the parameter heterogeneity of the Solow model found in other strands of the literature. Originality/value The authors apply a new approach to a worldwide sample obtaining novel results.

This paper analyses the determinants of the tourism demand, following an approach which innovates in a) using spatial models applying a well-founded specification selection process b) exploring the effects of two types of institutions, corruption and Rule of Law, and c) assessing the spillover effects of the COVID-19 shock on the international tourism demand in Portugal and Spain. The study is conducted using a sample of 109 countries for the period 1995-2018. It shows that tourism shocks in neighbouring countries, and particularly the coronavirus pandemic, significantly affect tourism demand in the host country with the same sign as the shock itself, and that the Rule of Law of the destination country influences positively on tourists’ inflow. Corruption does not seem to have significant effects on the tourist demand of the host country. From these results, we derive that national governments should provide fair and transparent legal frameworks that generate security for potential tourists. Moreover, national authorities of neighbouring countries are advised to cooperate in both promoting tourism and adopting coordinated actions against negative external shocks that hit them symmetrically, such as COVID-19.

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