Non-cash payments and corruption in the legal institutional context in emerging markets of ASEAN-5 and Vietnam

This study uses a PVAR model to analyze the impact of non-cash payments and legal institutions on corruption levels in ASEAN-5 and Vietnam during the period 1996–2022. Illegal transactions for corruption often take advantage of anonymity, mainly avoiding the banking system and using cash to avoid leaving traces. Therefore, the prevalence of cash in the economy can be an important factor affecting corruption, emphasizing the role of the central bank in restricting large-value cash to control corruption. The study provides empirical evidence on two aspects: the impact of non-cash payments on corruption in ASEAN-5 and Vietnam, as well as the relationship between legal institutions, administrative development and corruption. The results identify causal relationships between the rule of law index (RLI), institutional quality (RQI), online transaction value (IUP), mobile transactions (MB) and corruption index (CPI). These effects persist over time. Specifically, fluctuations in online transaction value affect the corruption index by about 8% from the third period, while mobile transactions affect the corruption index by about 2%. These effects are statistically significant and persistent.