Logo
Munich Personal RePEc Archive

Does easy availability of cash effect corruption? Evidence from panel of countries

Singh, Sunny and Bhattacharya, Kaushik (2015): Does easy availability of cash effect corruption? Evidence from panel of countries.

Warning
There is a more recent version of this item available.
[thumbnail of MPRA_paper_65934.pdf]
Preview
PDF
MPRA_paper_65934.pdf

Download (287kB) | Preview

Abstract

Using annual panel data of 54 countries for the period 2005-13, we examine whether cash in circulation, both aggregate and large denominated banknotes, affects the level of corruption in a country. Standard panel data models like pooled OLS, random effect and system GMM suggest that the ratios of (i) aggregate currency in circulation to M1 and, (ii) large denominated banknotes to M1 are both statistically significant determinants of corruption. Tests for reverse causality within a panel Granger framework reveal unidirectional causality of the first variable with corruption, but a bi-directional one with the second variable. These findings suggest that the central banks should try to limit the supply of banknotes of large denomination.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.