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Household Savings and Productive Capital Formation in Rural Vietnam: Insurance vs. Social Network

Listed author(s):
  • Thomas Gries

    ()

    (University of Paderborn)

  • Ha van Dung

    ()

    (University of Paderborn)

In this paper, we investigate the role of the social network nexus and the insurance nexus in determining household savings and productive capital formation in rural Vietnam. We analyze the issue in two dimensions, stocks and flows, and consider the exposure to negative shocks. The instrumental variable method is employed and unlike previous studies, we account for the endogeneity of all concerned variables. The results indicate that the social network nexus has more impacts in “ex ante” rather than in “ex post” households. In both households groups, the effects of the insurance nexus dominate over those of the social network nexus. In the case of the stocks, we also find that the precautionary view is held in liquid assets but not in productive assets.

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File URL: http://groups.uni-paderborn.de/wp-wiwi/RePEc/pdf/ciepap/WP81.pdf
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Paper provided by Paderborn University, CIE Center for International Economics in its series Working Papers CIE with number 81.

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Length: 32 pages
Date of creation: Jun 2014
Handle: RePEc:pdn:ciepap:81
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