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The importance of being consulted

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  • Alessandro Fedele
  • Andrea Mantovani

Abstract

Does management consulting facilitate the access to credit for start-ups? This paper tries to answer the question by developing a moral hazard framework where a firm applies for a bank loan to implement a risky project. Conditions are derived under which credit is granted only if the bank hires a management consultant, even when the latter does not improve the business practice.

Suggested Citation

  • Alessandro Fedele & Andrea Mantovani, 2010. "The importance of being consulted," Working Papers 1010, University of Brescia, Department of Economics.
  • Handle: RePEc:ubs:wpaper:1010
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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