Interfirm Relationships and Informal Credit in Vietnam

John McMillan and Christopher Woodruff

The Quarterly Journal of Economics, 1999, vol. 114, issue 4, 1285-1320

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.

Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (418)

Downloads: (external link)
http://hdl.handle.net/10.1162/003355399556278 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Inter-Firm Relationships and Informal Credit in Vietnam (1998)
Working Paper: Interfirm Relationships and Informal Credit in Vietnam (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:qjecon:v:114:y:1999:i:4:p:1285-1320.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva

More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().