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Visits to the client when competing for new consulting contracts: sourcing information or influencing the client?

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  • Roger Svensson

Abstract

Consulting firms (CFs) sell services on a project basis to many clients and must therefore continuously tender for new contracts. One frequently used strategy by CFs is to visit the clients in connection to the tenders. The reasons to the visits are: (1) to influence the client in his decision-making (e.g., marketing, bribing); and/or (2) to source information about the project so that a better proposal can be submitted. Using a unique database on individual export proposals submitted to emerging markets, which of these two reasons is the most important is examined empirically The estimations show that influencing the client dominates as explanation to the visits. Although it is not possible to determine whether this influence takes the form of bribing or marketing, all conditions necessary for bribes to occur are fulfilled.

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Bibliographic Info

Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 35 (2003)
Issue (Month): 14 ()
Pages: 1531-1541

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Handle: RePEc:taf:applec:v:35:y:2003:i:14:p:1531-1541

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  1. Paul R. Milgrom & John Roberts, 1984. "Price and Advertising Signals of Product Quality," Cowles Foundation Discussion Papers 709, Cowles Foundation for Research in Economics, Yale University.
  2. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
  3. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-41, August.
  4. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-54, July/Aug..
  5. Roger Svensson, 2001. "Success Determinants when Tendering for International Consulting Projects," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 8(1), pages 101-122.
  6. Rose-Ackerman, Susan, 1975. "The economics of corruption," Journal of Public Economics, Elsevier, vol. 4(2), pages 187-203, February.
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