Does microcredit improve rural households’ social network? evidence from Vietnam

Phan, Chung Thanh, Sun, Sizhong, Zhou, Zhang-Yue, and Beg, Rabiul (2020) Does microcredit improve rural households’ social network? evidence from Vietnam. The Journal of Development Studies, 56 (10). pp. 1947-1963.

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Abstract

Although microcredit targets both financial and, more importantly, social returns, it is unclear in existing literature that whether participating in microcredit programs fosters social network. Filling this gap, this study aims to quantitatively test whether microcredit improves the social network of rural households in Vietnam. Specifically, with microcredit borrowing to fund its family business, a representative household is engaged in a two-stage decision problem, namely to first choose a social network and then consumption to maximise its lifetime utility. Utility maximisation yields an optimal social network as a function of microcredit borrowing, which is estimated using the VARHS dataset from 2008 to 2016 in Vietnam. We find that microcredit improves both rural household’s social network quality and size.

Item ID: 68208
Item Type: Article (Research - C1)
ISSN: 1743-9140
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Copyright Information: © 2020 Informa UK Limited, trading as Taylor & Francis Group.
Additional Information:

A version of this publication was included as Chapter 6 of the following PhD thesis: Phan, Chung Thanh (2020) The impacts of microcredit on rural Vietnamese households. PhD thesis, James Cook University, which is available Open Access in ResearchOnline@JCU. Please see the Related URLs for access.

Date Deposited: 01 Jun 2021 23:46
FoR Codes: 38 ECONOMICS > 3803 Economic theory > 380304 Microeconomic theory @ 100%
SEO Codes: 15 ECONOMIC FRAMEWORK > 1505 Microeconomics > 150501 Consumption @ 50%
15 ECONOMIC FRAMEWORK > 1505 Microeconomics > 150507 Micro labour market issues @ 50%
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