Local Financial Development and Household Welfare: Microevidence from Thai Households

Gloede, Oliver; Rungruxsirivorn, Ornsiri
July 2013
Emerging Markets Finance & Trade;Jul/Aug2013, Vol. 49 Issue 4, p22
Academic Journal
The authors provide new microevidence on the relationship between financial development and welfare. Relying on the concept of local financial development, their analysis focuses on two dimensions of household welfare: investment and consumption. The results show that financial development is associated with a larger volume of productive investments and is also able to improve the financing of consumption; however, the effect of financial development on credit as an instrument to minimize consumption risk is not supported. This finding implies that consumption smoothing is only weakly improved by greater financial development.


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