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INTERFIRM RELATIONSHIPS AND INFORMAL CREDIT IN VIETNAM.
- Source :
- Quarterly Journal of Economics; Nov99, Vol. 114 Issue 4, p1285-1320, 36p, 11 Charts
- Publication Year :
- 1999
-
Abstract
- Trading relations in Vietnam's emerging private sector are shaped by two market frictions: the difficulty of locating trading partners and the absence of legal enforcement of contracts. Examining relational contracting, we find that a firm trusts its customer enough to offer credit when the customer finds it hard to locate an alternative supplier. A longer duration of trading relationship is associated with larger credit, as is prior information gathering. Customers identified through business networks receive more credit. These network effects are enduring, suggesting that networks are used to sanction defaulting customers. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00335533
- Volume :
- 114
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- Quarterly Journal of Economics
- Publication Type :
- Academic Journal
- Accession number :
- 2630205
- Full Text :
- https://doi.org/10.1162/003355399556278