Essays in microfinance- and social network-driven marketing at the base of the pyramid Public Deposited

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  • March 20, 2019
  • Ong, L. Lin
    • Affiliation: Kenan-Flagler Business School
  • In the past thirty years, microfinance has innovated the provision of financial services to microenterprises (businesses with five or fewer employees), growing aggressively to a USD $50 billion industry. A marketing lens gives us the empirical and theoretical foundations to understand this field, providing the tools to synthesize the ideas of social capital, microfinance, and networks into managerially important insights. I explore these concepts using a novel dataset assembled from surveys, personal networks, interviews, administrative banking data, and a randomized control trial (RCT) of microentrepreneurs in Kenya, where microenterprises are estimated to represent over 20% of the country’s total employment. Essay one builds on the relationship marketing literature’s identification of commitment as critical to maintaining successful business-to-consumer relationships. I find a positive relationship between household consumption and client commitment – however, this includes not only commitment to the firm, but also to their loan peers. This has implications for MFI client strategy, motivation to cultivate both positive client commitment towards the firm as well as social capital within the client’s intra-firm network. The second essay tackles an endogenous question: which came first, social capital or financial success? Although social capital is commonly accepted in economic development theory as a key driver of financial success, the methodological difficulty of studying its causal impact leave a gap in the literature. I use a RCT to administer a financial training, providing a channel to improve financial success. While we find that the training does significantly impact financial literacy and MFI financial measures, we do not find any moderating impact of baseline social capital on financial outcomes. This study provides a counterargument to the conventional wisdom that social capital increases efficiency of entrepreneurial information acquisition and application. These dissertation results provide an alternative view about the importance of social capital at the BoP: although social capital is a part of financial success, it doesn’t appear to have the causal impact previously theorized. Through an innovative dataset and rigorous experimental methods, this dissertation provides one of the first quantitative, network-based studies of social capital at the BoP. Implications for managers, policy makers, and researchers are discussed.
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Rights statement
  • In Copyright
  • Kushwaha, Tarun
  • Dinner, Isaac
  • Gielens, Katrijn
  • Balasubramanian, Sridhar
  • Jones Christensen, Lisa
  • Doctor of Philosophy
Degree granting institution
  • University of North Carolina at Chapel Hill Graduate School
Graduation year
  • 2016

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