Does Social Identity Constrain Rural Entrepreneurship? The Role of Financial Inclusion

Sandhya Garg (), Samarth Gupta and Sushanta Mallick
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Sushanta Mallick: Institute of Economic Growth, Delhi

No 460, IEG Working Papers from Institute of Economic Growth

Abstract: This paper examines whether better financial access can mitigate the impact of social identity on entrepreneurship. Using a novel dataset of Indian villages and distance to bank branches, we find that proximity to a bank branch improves non-agricultural entrepreneurship of underprivileged caste groups in India, with a significant entry occurring in sectors which were dominated by the privileged caste groups. We find that this effect is mediated by the uptake of institutional credit by under-privileged groups. Our results show that the financial inclusion can break rigid social norms around caste and occupation in India.

Pages: 41 pages
Date: 2023
New Economics Papers: this item is included in nep-agr, nep-ban, nep-dev, nep-ent, nep-fdg, nep-fle, nep-ger and nep-mfd
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Published as Institute of Economic Growth, Delhi, 2023, pages 1-41

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Persistent link: https://EconPapers.repec.org/RePEc:awe:wpaper:460

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