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Membership has its priveleges : the effect of social capital and neighbourhood characteristics on the earnings of microfinance borrowers

  • Rafael Gomez
  • Eric Santor

This paper examines the determinants of self-employment success for microcredit borrowers. Theories of social capital and neighbourhood effects are integrated in an attempt to account for earnings differentials amongst a unique sample of microfinance borrowers. The paper posits that social capital - social relations that facilitate individual action – is essential for microentrepreneurial success. Based on a survey and data collected by the authors, this study demonstrates that social capital is a positive determinant of self-employment earnings. It also highlights the role that neighbourhoods play in fostering social capital and improving microentrepreneurial performance.

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File URL: http://eprints.lse.ac.uk/361/
File Function: Open access version.
Download Restriction: no

Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 361.

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Date of creation: Nov 2001
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Publication status: Published in Canadian Journal of Economics, November, 2001, 34(4), pp. 943-966. ISSN: 1540-5982
Handle: RePEc:ehl:lserod:361
Contact details of provider: Postal: LSE Library Portugal Street London, WC2A 2HD, U.K.
Phone: +44 (020) 7405 7686
Web page: http://www.lse.ac.uk/

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  1. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
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  8. Benabou, R., 1992. "Heterogeneity, Stratification, and Growth," Working papers 93-4, Massachusetts Institute of Technology (MIT), Department of Economics.
  9. Ihlanfeldt, Keith R., 1997. "Information on the Spatial Distribution of Job Opportunities within Metropolitan Areas," Journal of Urban Economics, Elsevier, vol. 41(2), pages 218-242, March.
  10. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
  11. Glaeser, E.L. & Scheinkman, J.A., 1993. "Economic Growth in a Cross-Section of Cities," Harvard Institute of Economic Research Working Papers 1645, Harvard - Institute of Economic Research.
  12. William A. Darity & Arthur H. Goldsmith, 1996. "Social Psychology, Unemployment and Macroeconomics," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 121-140, Winter.
  13. Robert E. Hall & Charles I. Jones, 1996. "The Productivity of Nations," NBER Working Papers 5812, National Bureau of Economic Research, Inc.
  14. John F. Helliwell, 1996. "Do Borders Matter for Social Capital? Economic Growth and Civic Culture in U.S. States and Canadian Provinces," NBER Working Papers 5863, National Bureau of Economic Research, Inc.
  15. John M. Quigley, 1998. "Urban Diversity and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 127-138, Spring.
  16. Maluccio, John A. & Haddad, Lawrence James & May, Julian, 1999. "Social capital and income generation in South Africa, 1993-98," FCND discussion papers 71, International Food Policy Research Institute (IFPRI).
  17. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, March.
  18. Harry J. Holzer, 1987. "Hiring Procedures in the Firm: Their Economic Determinants and Outcomes," NBER Working Papers 2185, National Bureau of Economic Research, Inc.
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