nep-fle 2017-10-08 papers

on Financial Literacy and Education

Issue of 2017‒10‒08
two papers chosen by

Does inequality foster or hinder the growth of entrepreneurship in the long-run? By Roxana Gutiérrez; Luciana Méndez
This research aims to explore and examine empirically Indonesian Muslim financial inclusion profile using panel data. We explore various indicators for example if individual have borrowed money from financial institution, having an account, amount of borrowed money, and amount of money saved in financial services. This research uses IFLS (Indonesian Family Life Survey) fourth wave (2007) and fifth wave (2014) that has wide range information on financial inclusion indicators and other socio-economics variables that are not provided by other almost-similar-type database in Indonesia. We use Ordinary Least Square and Logit estimation to estimate what factors determine the probability of individual to have an access to financial service and the amount of money and individual has on average. The findings suggest that those who have better access to financial services are coming from urban area with better wealth, mostly are male and live in urban area. Banks remain to be a dominant source for Muslim in Indonesia to get a loan. Another determinant factor that increases the possibility for Indonesian to get loan is whether an individual has access to commercial bank like Bank Republik Indonesia (BRI). Baitul Maal WatTamwil (BMT) as one of Islamic microfinance is found to be statistically significant to increase probability of Indonesian Muslim to get an access to loans. By Riswanti Budi Sekaringsih; Novat Pugo Sambodo; Meikha Azzani; Esa Assyahid

Does inequality foster or hinder the growth of entrepreneurship in the long-run?

By:	Roxana Gutiérrez (Queen Mary University of London. School of Business and Management); Luciana Méndez (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
Abstract:	This article assesses the extent to which historical levels of inequality affect the creation and survival of businesses over time. To this end, we use the Global Entrepreneurship Monitor (GEM) survey across 66 countries over 2005–2011. We complement this survey with data on income inequality dating back to early 1800s and current institutional environment, such as the number of procedures to start a new business, countries’ degree of financial inclusion, corruption and political stability. We find that although inequality increases the number of firms created out of need, inequality reduces entrepreneurial activity as in net terms businesses are less likely to be created and survive over time. These findings are robust to using different measures of inequality across different points in time and regions, even if excluding Latin America the most unequal region in the world. Our evidence then supports theories that argue early conditions, crucially inequality, influence development path.
Keywords:	Inequality; entrepreneurship; panel data; instrumental variables
JEL:	M2 O1 D3 C23
Date:	2017–10
URL:	http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-10-17&r=fle

This research aims to explore and examine empirically Indonesian Muslim financial inclusion profile using panel data. We explore various indicators for example if individual have borrowed money from financial institution, having an account, amount of borrowed money, and amount of money saved in financial services. This research uses IFLS (Indonesian Family Life Survey) fourth wave (2007) and fifth wave (2014) that has wide range information on financial inclusion indicators and other socio-economics variables that are not provided by other almost-similar-type database in Indonesia. We use Ordinary Least Square and Logit estimation to estimate what factors determine the probability of individual to have an access to financial service and the amount of money and individual has on average. The findings suggest that those who have better access to financial services are coming from urban area with better wealth, mostly are male and live in urban area. Banks remain to be a dominant source for Muslim in Indonesia to get a loan. Another determinant factor that increases the possibility for Indonesian to get loan is whether an individual has access to commercial bank like Bank Republik Indonesia (BRI). Baitul Maal WatTamwil (BMT) as one of Islamic microfinance is found to be statistically significant to increase probability of Indonesian Muslim to get an access to loans.

By:	Riswanti Budi Sekaringsih (Centre for Research in Islamic Economics and Business (PKEBS), Faculty of Economics and Business, Universitas Gadjah Mada and Department of Islamic Economics, Faculty of Islamic Economics and Business, State Islamic University (UIN) Sunan Kalijaga Yogyakarta); Novat Pugo Sambodo (Centre for Research in Islamic Economics and Business (PKEBS), Faculty of Economics and Business, Universitas Gadjah Mada); Meikha Azzani (Centre for Research in Islamic Economics and Business (PKEBS), Faculty of Economics and Business, Universitas Gadjah Mada); Esa Assyahid (Centre for Research in Islamic Economics and Business (PKEBS), Faculty of Economics and Business, Universitas Gadjah Mada)
Keywords:	Financial Inclusion, Muslim, OLS, Logit, IFLS
JEL:	D12
Date:	2016–07
URL:	http://d.repec.org/n?u=RePEc:ugm:wpaper:2017007&r=fle

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