Can the use of code of conducts reduce informal fees? Evidence from firm survey in Vietnam

Abstract

Code of conduct is a useful guideline for employees’ behaviours and a tool to reduce frauds in advanced countries.
In Vietnam the amended Anti-corruption Law encourages firms to develop and apply their own code of conduct as
an anti-corruption tool. However, evidences of the code of conduct’s impact on firm legal compliance in Vietnam
is rare. This study examines whether the use of code of conduct help reduce corruption in term of informal fees.
Based on survey data from firms in Vietnam, the study shows that the use of code of conduct reduces informal
fees. This result suggests that firms could actively participate in the anti-corruption agenda by developing their
own code of conduct, along with appropriate internal control system.