Discrimination, Social Capital, and Financial Constraints: The Case of Viet Nam

Research output: Contribution to journalArticle

Authors

Colleges, School and Institutes

External organisations

  • University of Reading

Abstract

This paper examines the relationship among gender, social capital, and access to finance of micro, small, and medium enterprises in the manufacturing sector in Viet Nam. Our dataset is from the 2011, 2013, and 2015 results of the Micro, Small, and Medium Enterprise Survey in Viet Nam. Using the Heckman technique to control for sample selection bias, the estimates do not provide evidence for discrimination against female-owned enterprises in the formal lending market. Specifically, female entrepreneurs have a higher probability of getting a loan and they pay lower interest rates in comparison with male entrepreneurs. No discrimination in formal credit markets may arise from the preference for informal loans over formal loans as entrepreneurs tend to borrow informal loans before applying for formal ones. Further analysis shows that social capital could facilitate loan applications: firms that have a closer relationship with government officials and other business people can get loans of longer duration.

Details

Original languageEnglish
Pages (from-to)228-242
Number of pages15
JournalWorld Development
Volume102
Early online date6 Nov 2017
Publication statusE-pub ahead of print - 6 Nov 2017

Keywords

  • discrimination, entrepreneurship, financial constraints, gender