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Discrimination, social capital, and financial constraints: the case of Viet Nam

Pham, T. and Talavera, O. (2018) Discrimination, social capital, and financial constraints: the case of Viet Nam. World Development, 102. pp. 228-242. ISSN 0305-750X

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To link to this item DOI: 10.1016/j.worlddev.2017.10.005

Abstract/Summary

This paper examines the relationship among gender, social capital, and access to finance of micro, small,and medium enterprises in the manufacturing sector in Viet Nam. Our dataset is from the 2011, 2013, and2015 results of the Micro, Small, and Medium Enterprise Survey in Viet Nam. Using the Heckman technique to control for sample selection bias, the estimates do not provide evidence for discriminationagainst female-owned enterprises in the formal lending market. Specifically, female entrepreneurs havea higher probability of getting a loan and they pay lower interest rates in comparison with male entrepreneurs. No discrimination in formal credit markets may arise from the preference for informal loansover formal loans as entrepreneurs tend to borrow informal loans before applying for formal ones.Further analysis shows that social capital could facilitate loan applications: firms that have a closer relationship with government officials and other business people can get loans of longer duration.

Item Type:Article
Refereed:Yes
Divisions:Faculty of Arts, Humanities and Social Science > School of Politics, Economics and International Relations > Economics
ID Code:80936
Publisher:Elsevier

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