Household Savings and Productive Capital Formation in Rural Vietnam: Insurance vs. Social Network

Thomas Gries and van Dung Ha ()
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van Dung Ha: University of Paderborn

No 81, Working Papers CIE from Paderborn University, CIE Center for International Economics

Abstract: In this paper, we investigate the role of the social network nexus and the insurance nexus in determining household savings and productive capital formation in rural Vietnam. We analyze the issue in two dimensions, stocks and flows, and consider the exposure to negative shocks. The instrumental variable method is employed and unlike previous studies, we account for the endogeneity of all concerned variables. The results indicate that the social network nexus has more impacts in “ex ante” rather than in “ex post” households. In both households groups, the effects of the insurance nexus dominate over those of the social network nexus. In the case of the stocks, we also find that the precautionary view is held in liquid assets but not in productive assets.

Keywords: rural households; liquid assets; productive assets; social networks; organizations; insurance; disasters (search for similar items in EconPapers)
JEL-codes: O12 O16 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-06
New Economics Papers: this item is included in nep-ias, nep-mfd, nep-sea, nep-soc and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:pdn:ciepap:81

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