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Migration, Social Networks, And Credit: Empirical Evidence From Peru

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  • Sonia LASZLO
  • Eric SANTOR

Abstract

We seek evidence of the causal relationship between migration, social networks, and the probability of receiving credit in a developing country where credit markets are weak and internal migration is common. Migrants may face binding asymmetric information constraints as they often lack collateral. Social networks can help mitigate these constraints. Conversely, migrants might face higher liquidity constraints and might, therefore, demand more credit than nonmigrants. The effect of migration on participation in the credit market is thus ambiguous. Compounding this, migration and credit may be jointly determined. We utilize rich data from Peru to establish the net effect of migration on credit and the role that social networks play in this relationship.

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  • Sonia LASZLO & Eric SANTOR, 2009. "Migration, Social Networks, And Credit: Empirical Evidence From Peru," The Developing Economies, Institute of Developing Economies, vol. 47(4), pages 383-409, December.
    • Handle: RePEc:bla:deveco:v:47:y:2009:i:4:p:383-409
    DOI: 10.1111/j.1746-1049.2009.00091.x
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    Cited by:

    1. Chan Mono Oum & Gazi M. Hassan & Mark J. Holmes, 2022. "Impact of Microcredit on Labour Migration Decisions: Evidence from a Cambodian Household Survey," Working Papers in Economics 22/01, University of Waikato.
    2. Teodora Cristina Barbu & Iustina Alina Boitan, 2018. "Immigrants’ impact on financial market – European countries’ evidence," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(1), pages 183-212.
    3. Hao Cui & Joonmo Cho, 2020. "Does the Revised Hukou System Facilitate or Restrain the Short-Term Labor Inflows into Chinese Cities?," Sustainability, MDPI, vol. 12(4), pages 1-15, February.
    4. Jose Galdo, 2013. "The Long-Run Labor-Market Consequences of Civil War: Evidence from the Shining Path in Peru," Economic Development and Cultural Change, University of Chicago Press, vol. 61(4), pages 789-823.
    5. Grimard, F. & Laszlo, S., 2014. "Long-Term Effects of Civil Conflict on Women’s Health Outcomes in Peru," World Development, Elsevier, vol. 54(C), pages 139-155.
    6. Sarah Pearlman, 2014. "Dropouts, Defaulters, and Continuing Borrowers: Client Exit from Microfinance," The Developing Economies, Institute of Developing Economies, vol. 52(4), pages 301-321, December.
    7. Alain Kikandi Kiuma & Abdelkrim Araar & Christian Kamala Kaghoma, 2020. "Internal migration and youth entrepreneurship in the Democratic Republic of the Congo," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 790-814, August.
    8. Alain Kikandi Kiuma & Christian Kamala Kaghoma & Joelle Mukenyi Kalala & Allegra Kabamba Mbuyi, 2015. "Mobilité interne et entrepreneuriat des jeunes en République démocratique du Congo," Working Papers PMMA 2015-07, PEP-PMMA.

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