Publication Type

Working Paper

Publication Date

10-2014

Abstract

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.

Keywords

entrepreneurship, microfinance, economic globalization, social globalization, nonprofit organizations

Discipline

Finance | Finance and Financial Management

Research Areas

Finance

First Page

1

Last Page

42

Identifier

10.2139/ssrn.2512211

Publisher

SSRN

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

https://dx.doi.org/10.2139/ssrn.2512211

Comments

Revised & Resubmitted at Journal of Business Venturing

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