Social Capital, Network Effects and Savings in Rural Vietnam
Information failures are a major barrier to formal financial saving in low income countries. Households in rural communities often lack the information necessary to set up formal deposit accounts or are uncertain about the returns to saving formally. In this paper, we explore the extent to which social networks in rural Vietnam can play a role in increasing formal savings where knowledge gaps exist. Networks are defined as active membership of women´s unions and the quality of networks is measured by the level of formal savings observed among group members. We find that membership of high quality networks leads to higher levels of saving in formal financial institutions and to higher levels of saving for productive investments as compared with other precautionary or lifecycle motives. Our results suggest that transmitting financial information through formal networks could be effective in increasing formal savings at grassroots level. We also conclude that ensuring information disseminated by networks is both accurate and desirable as well as important given that behavioural effects are also found in low-quality networks.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: Katajanokanlaituri 6B, 00160 Helsinki|
Web page: http://www.wider.unu.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- T. Parker Ballinger & Michael G. Palumbo & Nathaniel T. Wilcox, 2003. "Precautionary saving and social learning across generations: an experiment," Economic Journal, Royal Economic Society, vol. 113(490), pages 920-947, October.
- Anna Aizer & Janet Currie, 2002.
"Networks or Neighborhoods? Correlations in the Use of Publicly-Funded Maternity Care in California,"
NBER Working Papers
9209, National Bureau of Economic Research, Inc.
- Aizer, Anna & Currie, Janet, 2004. "Networks or neighborhoods? Correlations in the use of publicly-funded maternity care in California," Journal of Public Economics, Elsevier, vol. 88(12), pages 2573-2585, December.
- Carol Newman & Fiona Wainwright, 2011. "Income Shocks and Household Risk-Coping Strategies: Evidence from Rural Vietnam," The Institute for International Integration Studies Discussion Paper Series iiisdp358, IIIS.
- Fafchamps, Marcel & Gubert, Flore, 2007.
"The formation of risk sharing networks,"
Journal of Development Economics,
Elsevier, vol. 83(2), pages 326-350, July.
- Cole, Shawn & Gine, Xavier & Tobacman, Jeremy & Topalova, Petia & Townsend, Robert & Vickery, James, 2010.
"Barriers to household risk management : evidence from India,"
Policy Research Working Paper Series
5504, The World Bank.
- Shawn Cole & Xavier Gine & Jeremy Tobacman & Petia Topalova & Robert Townsend & James Vickery, 2013. "Barriers to Household Risk Management: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 104-35, January.
- Robert M. Townsend & Shawn Cole & Jeremy Tobacman & Xavier Gine & James Ian Vickery & Petia Topalova, 2012. "Barriers to Household Risk Management; Evidence from India," IMF Working Papers 12/195, International Monetary Fund.
- Shawn Cole & Xavier Giné & Jeremy Tobacman & Petia Topalova & Robert M. Townsend & James Vickery, 2009. "Barriers to household risk management: evidence from India," Staff Reports 373, Federal Reserve Bank of New York.
- Petia Topalova & Shawn Cole & Xavier Gene & Jeremy Tobacman & Robert Townsend & James Vickery, 2011. "Barriers to Household Risk Management: Evidence from India," Working Papers id:4293, eSocialSciences.
- Marcel Fafchamps & Susan Lund, 2000.
"Risk-Sharing Networks in Rural Philippines,"
Economics Series Working Papers
10, University of Oxford, Department of Economics.
- Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, vol. 68(1), pages 115-132, July.
- Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 2002. "Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 209-244.
- Marcel Fafchamps & Chris Udry & Katherine Czukas, .
"Drought and Saving in West Africa: Are Livestock a Buffer Stock?,"
97013, Stanford University, Department of Economics.
- Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, vol. 55(2), pages 273-305, April.
- Timothy Conley & Udry Christopher, 2001. "Social Learning Through Networks: The Adoption of New Agricultural Technologies in Ghana," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 668-673.
- repec:dau:papers:123456789/4392 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:wp2012-39. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruck Tadesse)
If references are entirely missing, you can add them using this form.