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Membership has its privileges: the effect of social capital and neighbourhood characteristics on the earnings of microfinance borrowers
Author(s) -
Gomez Rafael,
Santor Eric
Publication year - 2001
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/0008-4085.00107
Subject(s) - microfinance , neighbourhood (mathematics) , earnings , economics , social capital , labour economics , financial system , finance , economic growth , sociology , mathematical analysis , social science , mathematics
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.