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Trusting Financial Institutions: Out of Reach, out of Trust?

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  • Ute Filipiak

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    (Schumpeter School of Business and Economics, University of Wuppertal)

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    Abstract

    This paper empirically investigates the relationship between individual trust in financial institutions and individual access to these institutions. Based on a large-scale survey of savings patterns of Indians, we find that individuals reporting that they do not have access to certain financial institutions within a commutable distance of one day are less likely to trust these institutions with their money. Moreover, we find that this relationship holds for different banks and financial institutions offering services in low-income areas and that differences in trust can be explained to some extent by differences in individual access.

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    File URL: http://elpub.bib.uni-wuppertal.de/servlets/DerivateServlet/Derivate-3437/sdp13002.pdf
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    Bibliographic Info

    Paper provided by Universit├Ątsbibliothek Wuppertal, University Library in its series Schumpeter Discussion Papers with number sdp13002.

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    Length: 49
    Date of creation: Feb 2013
    Date of revision:
    Handle: RePEc:bwu:schdps:sdp13002

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    Web page: http://elpub.bib.uni-wuppertal.de

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    Keywords: Trust; Financial Institutions; Access; India;

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    1. Stijn Van Nieuwerburgh & Laura Veldkamp, 2007. "Information Immobility and the Home Bias Puzzle," NBER Working Papers 13366, National Bureau of Economic Research, Inc.
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    6. Werner Boente & Ute Filipiak, 2011. "Financial Investments, Information Flows, and Caste Affiliation - Empirical Evidence from India," Schumpeter Discussion Papers sdp11014, Universit├Ątsbibliothek Wuppertal, University Library.
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    13. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    14. Gine, Xavier, 2005. "Access to capital in rural Thailand : an estimated model of formal versus informal credit," Policy Research Working Paper Series 3502, The World Bank.
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