McMillan & Woodruff (1999)Social Networks11.3McMillan & Woodruff (1999)Interfirm Relationships and Informal Credit in VietnamIn Vietnam, the laws of contract are incomplete.Informal relationshipsoften substitute for the courts in allowing deals to be made.Clientelistic relationships:studied by sociologists, anthropologists and eco-nomic historians. Very little econometric analysis on this thus far.The paper survey private firms in Vietnam and gets primary data on firm’srelationships with its customers and suppliers. They measure a firm’s trustby the amount of trade credit it grants its customers.Main findings:Trade credit is offered when(a) It is difficult for the customer to find an alternative supplier.(b) The supplier has information about the customers reliability eitherthrough prior investigation or through dealing with it.(c) The supplier belongs to a
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