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Does Social Embedding Influence Banking Habits? A Case of India

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  • Pinaki Roy
  • Amey Sapre

Abstract

This article attempts to empirically investigate the relationship of social embeddedness and banking behaviour in India. Social embeddedness is a construct that in general refers to non-market societies or activities, such as customs, traditions and reciprocity, that dominate the conduct of societies. Using the India Human Development Survey (IHDS) 2005 household survey data, we construct a weighted average score of social embedding as captured by memberships in societies and network groups to estimate their impact on the likelihood of a household’s access to banking. Findings show that social embeddedness has a positive and substantial impact on improving a household’s access to banking. We argue that social embedding can serve as an effective means to enhance the reach and access of financial services if conventional inclusion programmes were to utilize and exploit such social channels. JEL Classification: C23, D71, G20

Suggested Citation

  • Pinaki Roy & Amey Sapre, 2016. "Does Social Embedding Influence Banking Habits? A Case of India," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 15(2), pages 169-190, August.
    • Handle: RePEc:sae:emffin:v:15:y:2016:i:2:p:169-190
    DOI: 10.1177/0972652716645892
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    References listed on IDEAS

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    1. Mark Granovetter, 2005. "The Impact of Social Structure on Economic Outcomes," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 33-50, Winter.
    2. Isabelle Le Breton-Miller & Danny Miller, 2009. "Agency vs. Stewardship in Public Family Firms: A Social Embeddedness Reconciliation," Entrepreneurship Theory and Practice, , vol. 33(6), pages 1169-1191, November.
    3. Sharon Collard, 2007. "Toward Financial Inclusion in the UK: Progress and Challenges," Public Money & Management, Taylor & Francis Journals, vol. 27(1), pages 13-20, February.
    4. Benhabib, Jess & Spiegel, Mark M, 2000. "The Role of Financial Development in Growth and Investment," Journal of Economic Growth, Springer, vol. 5(4), pages 341-360, December.
    5. James Moody & Douglas R. White, 2000. "Structural Cohesion and Embeddedness: A Hierarchical Conception of Social Groups," Working Papers 00-08-049, Santa Fe Institute.
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    Cited by:

    1. Imad Jabbouri & Omar Farooq & Maryem Naili & Issa Helmi, 2024. "Navigating the Financing Constraints: The Role of Social Capital in Developing Countries," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 23(3), pages 360-386, September.
    2. Sonia Kumari Selvarajan & V. G. R. Chandran, 2024. "Financial Inclusion Trajectories: Geographical Dispersion, Convergence, and Development Implications," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(4), pages 897-924, August.

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    More about this item

    Keywords

    Financial inclusion; bank account; social network; social embedding; India;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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