Gomez, Rafael and Santor, Eric
Membership has its priveleges : the effect of social capital and neighbourhood characteristics on the earnings of microfinance borrowers.
Canadian journal of economics, 34
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.
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