We examine how different types of country-level globalization and the industry structure of microfinance institutions (MFIs) affect organization-level microcredit interest rates which crucially affect the poor's entrepreneurial opportunities. We develop an opportunity structure perspective that argues that MFI interest rates can be reduced by egalitarian-based social globalization but increased by neoliberal-based economic globalization. Moreover, stronger presence of nonprofit organizations in the microfinance industry lowers interest rates. Furthermore, these three forces can moderate the relationship between MFIs' outreach to the poor and average interest rate. Analyses of 2,559 MFI observations across 74 countries from 2002 - 2012 largely support our hypotheses.
entrepreneurship, microfinance, economic globalization, social globalization, nonprofit organizations
Finance | Finance and Financial Management
LIANG, Hao; MARQUIS, Chris; and SUN, Sunny Li.
Finance and social responsibility in the informal economy: Institutional voids, globalization and microfinance institutions. (2014). 1-42. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/5408
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