The role of institutions on cross-country card payments

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The number of card payments has increased rapidly over the last 10 years. Card payments have become substitutes for cash payments because they outweigh cash payments on speed, cost and simplicity. However the number of card payments per country differs between countries. This paper performs a cross-country analysis on institutions and card payments and in addition does a within country analysis on corruption and card payments. The role of social trust, uncertainty avoidance and corruption is researched on the number of card payments. This is done by using an OLS and GLS regression and for the within country analysis a fixed effect model is used. The main findings are that social trust and uncertainty do not play a significant role in the number of card payments. But, countries that display lower levels of corruption correlate with higher numbers of card payments. Further, the paper found that a change in corruption level leads to a change in the number of card payments. However this change in the number of card payments takes some years. Limitations are present on the comparability of the data and the lack of a causal relationship. Future research needs to focus on finding causal relationships.
Faculteit der Managementwetenschappen