Creditworthiness as a signal of trustworthiness: field experiment in microfinance and consequences on causality in impact studies

Leonardo Becchetti and Pierluigi Conzo

No wp17, Econometica Working Papers from Econometica

Abstract: Creditworthiness and trustworthiness are almost synonyms since the act of conferring a loan has the indirect effect of signaling the trustworthiness of the borrower. We test the creditworthiness-trustworthiness nexus in an investment game experiment on a sample of participants/non participants to a microfinance program in Argentina and find that trustors give significantly more to (and believe they will receive more from) microfinance borrowers. Trustees’ first and second order beliefs are also consistent with this picture. Our findings identify a “horizontal trustworthiness externality” which creates a direct (loan-performance) causality nexus since the mere loan provision increases the borrower’s attractiveness as a business partner.

Keywords: field experiment; microfinance; investment game; trust; trustworthiness (search for similar items in EconPapers)
JEL-codes: C93 D03 O16 (search for similar items in EconPapers)
Pages: 63
Date: 2009-12
New Economics Papers: this item is included in nep-cbe, nep-cfn, nep-dev, nep-exp, nep-mfd and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://econometica.it/wp/wp17.pdf (application/pdf)

Related works:
Journal Article: Enhancing capabilities through credit access: Creditworthiness as a signal of trustworthiness under asymmetric information (2011)
Working Paper: Creditworthiness as a signal of trustworthiness (2010)
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:ent:wpaper:wp17

Access Statistics for this paper

More papers in Econometica Working Papers from Econometica Contact information at EDIRC.
Bibliographic data for series maintained by Matteo Rizzolli ().