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Category Archives: D14

Social Capital and Financial Development after Economic Shocks: Evidence from Italy after the Financial Crisis of 2007-2009

By Sujay Rao & Ethan Lampert

Like traditional forms of capital, social capital – an intangible measure of an individual’s social networks, trust in institutions, and participation in civic life – has implications for personal and financial behavior. Individuals from educated, well established backgrounds with fruitful family ties may be more amenable to opening new lines of credit or investing in stock markets due to their trust in and connectedness with society. But what happens after a major economic shock, such as the financial crisis of 2008? Using Italy as a case study and panel data from the Survey of Household Income and Wealth, we find that social capital has significant effects on an individual’s credit card usage, informal borrowing, and choice to invest in securities.

View Thesis

Advisors: Professor Grace Kim, Professor Michelle Connolly, Professor Giovanni Zanalda | JEL Codes: G01, G2, O1, D1, D14

Are the Chinese Altruistic? Explaining Motives behind Chinese Intergenerational Transfers using the Strategic Bequest Motive

By Lucy Yin

Two main competing theories regarding intergenerational transfers from adult children to elderly parents exist: the altruism model and the exchange model. The strategic bequest motive supports the exchange model in claiming parents with bequeathable wealth will incentivize children to devote more resources to parents in order to receive a larger bequest. I use data from the Chinese Longitudinal Healthy Longevity Survey to assess whether children increase monetary or time transfers to elderly parents with bequeathable property ownership. My findings suggest an altruistic model at play, which contradicts most findings in East Asian countries but may be a trend found in other developing countries.

Honors Thesis

Data Set

Advisor: Frank Sloan, Michelle Connolly | JEL Codes: D14, D64 | Tagged: Bequests, Altruism, Intergenerational Transfers

The Rise of Mobile Money in Kenya: The Changing Landscape of M-PESA’s Impact on Financial Inclusion

By Hong Zhu

M-PESA, the hugely popular mobile money system in Kenya, has been celebrated for its potential to “bank the unbanked” and increase access to financial services. This paper provides evidence to support this idea and explores mechanisms through which this might be the case. It specifically looks at the savings products held by individuals and how this changes in relation to M-PESA use. It then constructs an index for measuring the extent to which individuals are integrated into the formal financial sector. This paper argues that M-PESA’s effect on financial inclusion is a growing phenomenon, which suggests that keeping pace with the rapid evolutions of this mobile money system should be a high priority for researchers. As this paper elucidates, M-PESA has become notably more integrated with the formal financial sector in 2013 as compared to 2009, which holds implications for user behavior.

Honors Thesis

Advisor: Michelle Connolly, Xiao Yu Wang | JEL Codes: D14, E42, G21, G23, O1, O17, O16, O33 | Tagged: Financial Inclusion, Mobile Money, Savings,Technology

Questions?

Undergraduate Program Assistant
Jennifer Becker
dus_asst@econ.duke.edu

Director of the Honors Program
Michelle P. Connolly
michelle.connolly@duke.edu