Financial settlement modes and corruption: Evidence from developed nations
AbstractUsing recent pooled data from several developed nations, the paper uniquely examines whether the composition of payment instruments has a bearing on the prevalence of corruption in a country. Our results suggest that the choice of instruments matters. Paper credit transfer transactions are consistently associated with corrupt activities, while credit card transactions tend to reduce them. Cheques generally increase corruption, the results with respect to nonpaper credit transfers are mixed, while direct debits fail to show significant effects on corruption. These findings hold for alternative corruption measures and when allowance is made for endogeneity of payment instruments.
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Bibliographic InfoPaper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 4/2011.
Length: 22 pages
Date of creation: 28 Apr 2011
Date of revision:
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Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
Web page: http://www.suomenpankki.fi/bofit_en/
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corruption; cheques; credit card; cash; direct debit; payment instruments;
Other versions of this item:
- F30 - International Economics - - International Finance - - - General
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-07 (All new papers)
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- Quintano, Claudio & Mazzocchi, Paolo, 2013. "The shadow economy beyond European public governance," Economic Systems, Elsevier, vol. 37(4), pages 650-670.
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