Skip to main content

Kinship and Financial Networks, Formal Financial Access, and Risk Reduction

Buy Article:

$19.00 plus tax (Refund Policy)

Abstract:

Kinship networks are beneficial for smoothing consumption and investment, but the channels are not well understood. We study the financing devices used for consumption and investment by Thai households. Households that are connected to banks achieve significantly better consumption smoothing than unconnected households; indirect connections via interhousehold borrowing are as effective as direct borrowing. Investment appears to be facilitated by kinship: households with kin in the village display reduced sensitivity of investment to income, while connections to banks do not significantly reduce sensitivity. Kin may act as “implicit collateral,” permitting borrowing that would violate repayment constraints in its absence.

Document Type: Research Article

DOI: http://dx.doi.org/10.1257/aer.102.3.289

Publication date: May 1, 2012

More about this publication?
aea/aer/2012/00000102/00000003/art00049
dcterms_title,dcterms_description,pub_keyword
6
5
20
40
5

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more