Changes in Social Network Structure in Response to Exposure to Formal Credit Markets

• 成果类型: Article; Early Access
• 署名作者: Banerjee, Abhijit; Breza, Emily; Chandrasekhar, Arun G.; Duflo, Esther; Jackson, Matthew O.; Kinnan, Cynthia
• 署名单位: Massachusetts Institute of Technology (MIT); National Bureau of Economic Research; Harvard University; Stanford University; Universite PSL; College de France; The Santa Fe Institute; Tufts University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdad065
• 发表日期: 2023
• 关键词: microfinance evidence; microcredit evidence; informal insurance; RISK; impacts; MODEL; COMMITMENT; selection; transfers; savings

摘要

We show that the entry of formal financial institutions can have far-reaching and long-lasting impacts on informal lending and social networks more generally. We first study the introduction of microfinance in 75 villages in Karnataka, India, 43 of which were exposed to microfinance. Using difference-in-differences, we show that networks shrank more in exposed villages. Moreover, links between households that were both unlikely to borrow from microfinance were at least as likely to disappear as links involving likely borrowers. We replicate these surprising findings in the context of a randomised controlled trial (RCT) in Hyderabad, where a microfinance institution randomly selected 52 of 104 neighbourhoods to enter first. Four years after all neighbourhoods were treated, households in early-entry neighbourhoods had credit access longer and had larger loans. We again find fewer social relationships between households in these neighbourhoods, even among those ex-ante unlikely to borrow. Because the results suggest global spillovers, atypical in usual models of network formation, we develop a new dynamic model of network formation that emphasizes chance meetings, where efforts to socialize generate a global network-level externality. Finally, we analyse informal borrowing and the sensitivity of consumption to income fluctuations. Households unlikely to take up microcredit suffer the greatest loss of informal borrowing and risk sharing, underscoring the global nature of the externality.