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McMillan & Woodruff (1999) Social Networks (2) there will be more trade credit (a) when the supplier inspects the customer directly and (b) in relationships of longer duration (3) a supplier belonging to a network will grant more trade credit. Information: Learn about reliability of a customer through the network in- formation. Sanctions: Ability to sanction customers that renege. Data 259 non-state firms. Private firms: 23% of output. See Table 1 for the firm characteristics. Vietnam is still state dominated.
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Unformatted text preview: private organisations. Heart of survey: questions about Frm’s relationships with customer. Portion of bill paid after delivery = measure of credit supply. Information on 518 manufacturer – customer relationships and 518 man-ufacturer – supplier relationships. Take out relationships with state enter-prises and left with 242 customer and 254 supplier relationships. Development Economics, LSE Summer School 2007 224...
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