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Improving the functioning of the rural financial markets of Armenia

  • Kasarjyan, Milada
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    Theoretical literature suggests that social capital, respectively the underlying social networks, facilitate access to otherwise lacking production factors such as financial resources. In addition, the manifestation of different dimensions of social capital is suggested to facilitate collective action and better outcomes in communities. This work analyses by means of Social Network Analysis the role of social capital (bonding and bridging dimensions) in accessing productive resources, in particular access to information and micro-credit. In addition, it determines empirically the significance of social capital (structural and cognitive dimensions) for the credit repayment performance of joint liability borrowing group members. The significance of both cognitive and structural social capital shows that it is essential to consider different dimensions of social capital in such an analysis. Otherwise, analysis may result to biased results. The results suggest that transition brought not only socio-economic changes but also changes of social structures and social support networks to rural Armenia. Though village culture appears to be preserved, social support networks prioritise and benefit the kin members first.

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    This book is provided by Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO) in its series Studies on the Agricultural and Food Sector in Central and Eastern Europe with number 62 and published in 2011.
    Volume: 62
    Handle: RePEc:zbw:iamost:62
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    1. Maitreesh Ghatak & Timothy W. Guinnane, 1998. "The Economics of Lending with Joint Liability: Theory and Practice," Discussion Papers 98-16, University of Copenhagen. Department of Economics.
    2. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    3. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, June.
    4. Stiglitz, Joseph E, 1996. "Some Lessons from the East Asian Miracle," World Bank Research Observer, World Bank Group, vol. 11(2), pages 151-77, August.
    5. Hoff, Karla & Stiglitz, Joseph E, 1990. "Imperfect Information and Rural Credit Markets--Puzzles and Policy Perspectives," World Bank Economic Review, World Bank Group, vol. 4(3), pages 235-50, September.
    6. Woolcock, Michael & Narayan, Deepa, 2000. "Social Capital: Implications for Development Theory, Research, and Policy," World Bank Research Observer, World Bank Group, vol. 15(2), pages 225-49, August.
    7. van Bastelaer, Thierry & Leathers, Howard, 2006. "Trust in Lending: Social Capital and Joint Liability Seed Loans in Southern Zambia," World Development, Elsevier, vol. 34(10), pages 1788-1807, October.
    8. Besley, T. & Coate, S. & Loury, G., 1990. "The Economics Of Rotating Savings And Credit Associations," Papers 149, Princeton, Woodrow Wilson School - Development Studies.
    9. Timothy Besley, 1995. "Nonmarket Institutions for Credit and Risk Sharing in Low-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 115-127, Summer.
    10. repec:att:wimass:9127 is not listed on IDEAS
    11. Ghatak, Maitreesh, 1999. "Group lending, local information and peer selection," Journal of Development Economics, Elsevier, vol. 60(1), pages 27-50, October.
    12. Adriaan R. Soetevent, 2006. "Empirics of the Identification of Social Interactions; An Evaluation of the Approaches and Their Results ," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 193-228, 04.
    13. Wydick, Bruce, 1999. "Can Social Cohesion Be Harnessed to Repair Market Failures? Evidence from Group Lending in Guatemala," Economic Journal, Royal Economic Society, vol. 109(457), pages 463-75, July.
    14. Amin, Sajeda & Rai, Ashok S. & Topa, Giorgio, 2003. "Does microcredit reach the poor and vulnerable? Evidence from northern Bangladesh," Journal of Development Economics, Elsevier, vol. 70(1), pages 59-82, February.
    15. Coffé, Hilde & Geys, Benny, 2006. "Towards an empirical characterization of bridging and bonding social capital
      [Zur empirischen Charakterisierung von heterogenen (bridging) und homogenen (bonding) Arten des Sozialkapitals]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-11, Social Science Research Center Berlin (WZB).
    16. Besley, Timothy & Coate, Stephen, 1995. "Group lending, repayment incentives and social collateral," Journal of Development Economics, Elsevier, vol. 46(1), pages 1-18, February.
    17. Huppi, Monika & Feder, Gershon, 1989. "The role of groups and credit cooperatives in rural lending," Policy Research Working Paper Series 284, The World Bank.
    18. repec:bla:restud:v:60:y:1993:i:3:p:531-42 is not listed on IDEAS
    19. Hans G. P. Jansen & John Pender & Amy Damon & Willem Wielemaker & Rob Schipper, 2006. "Policies for sustainable development in the hillside areas of Honduras: a quantitative livelihoods approach," Agricultural Economics, International Association of Agricultural Economists, vol. 34(2), pages 141-153, 03.
    20. Zeller, Manfred & Sharma, Manohar, 1998. "Rural finance and poverty alleviation," Food policy reports 8, International Food Policy Research Institute (IFPRI).
    21. Simtowe, Franklin & Zeller, Manfred, 2006. "Determinants of Moral Hazard in Microfinance: Empirical Evidence from Joint Liability Lending Programs in Malawi," MPRA Paper 461, University Library of Munich, Germany.
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