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The impact of microcredit on self-employment profits in Vietnam

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Abstract

This study examines the impact of microcredit on household self-employment profits in Vietnam. For two indicators of credit participation – a dichotomous participation dummy and the accumulated amount of microcredit received per household – the analysis reveals a positive effect on household profits. The analysis also reveals that an instrumental variable method within a fixed-effects framework can control for the possible endogeneity of credit and thereby identify the true effect of credit.

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