Does Participation in Productive Associations Signal Trust and Creditworthiness? Evidence for Nicaragua

18 Pages Posted: 25 Jun 2007

Multiple version iconThere are 2 versions of this paper

Date Written: July 20, 2007

Abstract

This article studies the extent to which participation in productive associations in Nicaragua contributes to increase individual's access to social programs and credit services. By participating in productive associations, individuals give a good signal to firms and are rewarded with better transactions and more access to the services they provide, ceteris paribus. Estimates using 2005 data indicate that households that participate in productive associations display higher access to credit and to social programs that promote investment. Additionally, participation in productive associations is weakly associated to more favorable credit outcomes among those households who receive loans, such as lower interest rates and a lower probability of wanting more credit than what was accessible to them.

Keywords: Participation (membership), associations (networks), asymmetry of information, signaling, trustworthiness, social programs, credit

JEL Classification: D82, C90, G21, I31

Suggested Citation

Angel-Urdinola, Diego F. and Molina, Ezequiel, Does Participation in Productive Associations Signal Trust and Creditworthiness? Evidence for Nicaragua (July 20, 2007). Available at SSRN: https://ssrn.com/abstract=996041 or http://dx.doi.org/10.2139/ssrn.996041

Diego F. Angel-Urdinola

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Ezequiel Molina (Contact Author)

World Bank ( email )

1818 H street NW
Washington, DC 20433
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
34
Abstract Views
545
PlumX Metrics